Baroness Northover: asked Her Majesty's Government:
	What is their response to the recent UNICEF report, Children—the missing face of AIDS.

Baroness Northover: My Lords, I thank the noble Baroness for that reply and welcome the efforts made both by her and the Government generally on this matter. However, since I asked her a Question exactly one year ago, on World Aids Day, another 3 million people have died of whom 570,000 were children. Now, 15 million children are AIDS orphans. Does she agree with the recent UNICEF report that children have been the invisible face of this pandemic? Clearly, keeping their parents alive is absolutely key, but stopping mother-to-child infection, treating infected children, extending prevention programmes to include all children and strengthening the rights of women and children in particular are all important. Will the Minister ensure that the needs of children are at the centre of the Government's plans to counter the AIDS pandemic in future?

Baroness Amos: My Lords, the noble Baroness is right; we need an holistic approach. Nutrition is important, as are developing the health sector and working on prevention. Taking individual responsibility is particularly important for women and girls who may find themselves in situations where they have to take action themselves rather than depend on others. We take an holistic approach in all countries and also seek to work with partners to ensure that we have a co-ordinated approach at country level.

Lord McKenzie of Luton: My Lords, we have received representations from a range of stakeholders on the issue. DTI officials are preparing a cost-benefit analysis of the scope for further liberalisation of Sunday trading laws.

Lord Anderson of Swansea: My Lords, my noble friend will be aware of the campaign currently being waged by very large retailers, including Tesco, Asda and Kingfisher in favour of modifying or indeed abolishing the restrictions on Sunday trading in the 1994 Act, thereby removing one of the competitive advantages of smaller independent stores. Would my noble friend agree that to remove or even to modify restrictions and move to perhaps nine hours would be a major blow to the smaller independent retailers and hardly a proper purpose of public policy?

Lord McKenzie of Luton: My Lords, the department receives representations from a range of people including the large stores, but also from those who wish to keep the current arrangements or even to move back from where we are. The issue of the impact on small retailers is something the cost benefit analysis will have to take into account, and will be a key consideration.

Lord McKenzie of Luton: My Lords, the analysis is just getting underway, but that is a pertinent point that will be taken into account, and it has an impact on the retail sector whatever happens on Sunday trading hours.

Lord Judd: My Lords, my noble friend referred to an assessment of the threat. Does he agree that the nature of the threat that faces us is changing beyond all expectation even a short time ago, and that therefore in government policy it would be most unwise to become prisoners of procurement policies made before the changing nature of the threat was fully understood?

Lord Brennan: rose to call attention to the prospects of achieving a fair and positive outcome in the forthcoming World Trade Organisation round in Hong Kong; and to move for Papers
	My Lords, the development of international trade depends on a fair balance between national self-interest and global free trade. The WTO is the means by which that fair balance can be pursued. In 2001, at Doha, the WTO placed a strong emphasis on helping the developing countries to take a larger part in world trade. It is at Hong Kong in a few weeks' time that the final stage of the Doha agenda should be resolved—or at least a framework resolved for completion of the round in 2006.
	What, therefore, should the Hong Kong meeting aim for? What can it reasonably achieve? What will remain to be done? In considering those questions today, the House is greatly assisted by the report on the next WTO meeting, published by the International Trade Sub-Committee of the European Union Committee of your Lordships' House, chaired by the noble Lord, Lord Radice. There are many problems to be identified and many solutions to be resolved. It is essential, is it not, that in engaging in that task those present in Hong Kong should eschew rhetoric, avoid the pressure of the last minute and negotiate to the hilt in the manner that so disastrously failed in Cancun? After five years there should be time for careful, detailed reflection.
	In considering what will happen, let us start with our position in the United Kingdom. It has been and probably always will be our destiny to be a trading nation. We are the eighth largest exporter in the world and in the year ending 2004 the total of our exports was £190 billion. We are the second largest exporter in the world of services, and £80 billion of that £190 billion reflects the value of our services exports. For us, Hong Kong and its aftermath are vital to our trading health.
	The present Government have pursued all along a fair, reasonable and positive policy towards WTO reform and the Doha agenda in particular. It is inevitable, is it not, that in Hong Kong our ministerial team will be looked to, either publicly or in private, for that sense of measured and fair compromise which the world expects from the British? We wish our ministerial team well. They, of course, will support the European objective, but they should not default on their national commitment to represent our interests, as required.
	The Doha agenda remains. The majority of its member countries and populations are from the developing world. As the draft ministerial text issued this week states, its needs and interests are at the heart of the Doha agenda. Paragraph 1 of that text rehearses, proclaims and shares a determination to fulfil that agenda. What is the main issue? It is agriculture. There must be an opening on that issue first and foremost in Hong Kong—at least a framework, if not a final decision—and the two most interested parties from the developed world are the United States and the European Union.
	The United States has taken an extremely strong protectionist line in the cotton industry—I use that by way of example. It is remarkable to find that in the years 1999 to 2005 US subsidies to its cotton producers amounted to 86 per cent of the total value of the product—or $17 billion. Eighty per cent of that total was paid to fewer than 3,000 enterprises. It is an imbalance compared with Burkina Faso, Benin, Chad and Mali that borders on the grotesque. It cannot possibly be justified, save on the express basis of protectionism. If we in the developed world are to move away from protectionism, cotton allows the United States an extremely good first way in which to illustrate that move.
	At the moment, as we know only too well, agriculture accounts for 2 per cent of the European Union's product, but it occupies 40 per cent of the Union's budget. How can that possibly be justified? The two units—the United States and Europe—give $50 billion in aid and $350 billion in agricultural subsidies. That cannot possibly be allowed to continue. To preach—I use the word pejoratively—to the developing world that it must adapt to free trade when we maintain such regimes borders on the hypocritical. That is why at Doha the developed world realised its duty—probably a greater duty towards world trade than that owed by the smaller, less developed and poorer countries.
	What, therefore, is achievable in agriculture? The first principle—I hope that noble Lords will forgive me for the trite comment—is negotiation. Difficult though it is in public, if a position is put but is not met with a response, that is not negotiation. At the moment, the United States has put forward a large offer in terms of cutting subsidies. The European Union has put up its third offer in recent months, now approaching 39 per cent. The question is: is it enough? At the very least, it calls for a response, particularly from countries such as Brazil and India, which enjoy new economic strengths and domestically strong agricultural markets.
	I shall give a few technical examples of how one can approach negotiation on this front step by step. The European Union subsidy regime dedicates up to $5 billion to export incentive or relief. It is not much, but it is a start. The $350 billion can be divided up and serve to produce a subset of $100 billion which is related to production and trade subsidy—what is called coupled arrangements. That is a second step. Some of it is surely open to negotiation. Coupling that with the 39 per cent provides a beginning. In these negotiations on agriculture, whether it be cotton, sugar or textiles, there are bound to be losers, countries that cannot compete with a free trade regime and whose needs must be met. The WTO has recognised that.
	So agriculture comes first. It is simply illogical and of no negotiating strength to say to poor countries around the world, "You accept our offer on agriculture and open up your markets to us. That is the deal". That is not a deal, but it is the beginning of negotiation. There are other smaller features, very important in their context, which Commissioner Mandelson has put on the table: medicinal products, relief from the TRIPS regime in relation to drug access for those in need in the developed world, compensation for loss of access to markets such as for the sugar countries that I have mentioned already and cotton which I have also mentioned. Then there are the least developed countries. Paragraph 28 of a ministerial text of this week says:
	"we agree to fully implement duty-free and quota-free market access for products originating from LDCs by the end of the Round in a manner that ensures security and predictability".
	Let us stand by that promise. The last thing that can be achieved is building capacity for trade.
	Finally, what of the longer term? World trade bespeaks a world agenda, not a Western economic unit, dealing with the rest of the world—a world agenda. The points I make for a longer-term debate and reform are as follows. First, the least developed countries and small economies must continue to get help. There is no equality between the rich man in his mansion and the poor man at the gate, but there can be an equitable sharing that benefits both. Secondly, commodity dependent countries must be protected against short-term profit which is not accompanied by long-term investment. Thirdly, trade relates to debt and debt to finance—all three go together. Fourthly, there is no outreach of any consequence between the world trade system, parliaments and civil society. It is far too technical and it is not explained enough to those, like us, who, from time to time, have to legislate about it. That cannot continue. There should be regional trade agreements to give local strength as part of the world picture.
	Fifthly, there should be technical assistance. It is an uninspiring phrase but it is vital. Those who want to trade internationally have to be trained to trade internationally to protect themselves. It is lamentable that the technical assistance document from the WTO of recent months complains that its members, usually us, the rich, are not paying their dues and the 2006 technical assistance plan may founder. We all pay about $90 million to support the WTO for a trade regime that involves trillions. How on earth can we not spend more money on helping those we want to help us to benefit our people as well as theirs?
	Lastly, I commend to the House the book Just World, which was published by the Fabian Society last summer. It is not written on a party political basis, but on the basis of what the world needs. It is sensible, pragmatic and worth pursuing.
	The net result is that we cannot afford failure at the meeting in Hong Kong. It must start towards success, possibly with an extraordinary meeting in six months' time. The CBI has it right: at Hong Kong, and soon after, it is vital that the authority and credibility of the WTO is reinforced. I have every confidence that our Government will do the best they can to ensure that the authority of the WTO is maintained.

Lord Radice: My Lords, I congratulate my noble friend on his excellent speech and thank him for allowing the report of my sub-committee to be discussed during his debate. It was a happy conjunction of events that my noble friend put forward for debate the subject of the WTO and the Hong Kong ministerial and my committee completed its report on the same subject last week and received the support of the main EU committee on Tuesday. Knowing that this topic was to be debated today, I asked my noble friend whether our report could "piggyback" on his debate, and he was kind enough to agree. I think it is in line with the Puttnam report, which sensibly suggested that topical issues should, if possible, be debated topically. A report on the Hong Kong ministerial that has printed on its front the date "13th-18th December" has a limited shelf-life, so we are grateful to my noble friend Lord Brennan and to the usual channels that we have been given this opportunity to discuss our report in this debate.
	Noble Lords will recall that in June 2004, the European Union Select Committee published a report on the role of the EU in the WTO organisation, following the disastrous collapse of the ministerial meeting at Cancun. In that report, we strongly argued the case for further trade liberalisation for all countries, including developing countries. It is in their interest as well as that of rich countries. Despite the failure of Cancun, we believe that it is right to continue to support the main commitments of the Doha declaration of November 2001. As noble Lords will remember, it promised the fundamental reform of agricultural support and access, the reduction of non-tariff barriers and special attention to the needs and interests of developing countries. In our 2004 report, we made a number of recommendations that we hoped would get the Doha round back on track. They included an EU commitment to phase out agricultural export subsidies, more flexibility from the EU on reductions in agricultural tariffs, reductions in industrial tariffs—that is called NAMA—and making real progress in reducing trade in services. For the convenience of the House, the conclusions of our previous report are published in Appendix 3 of our report on the Hong Kong ministerial.
	Given the importance of the Hong Kong ministerial as a staging post to a successful Doha round, we decided to undertake a short follow-up inquiry and report. As we did not have much time, we did not take full evidence, as we had previously, but we took oral evidence from the Minster for Trade and from Roger Liddle, adviser to the EU Trade Commissioner, Peter Mandelson. We also received some written evidence, including from Oxfam, Christian Aid and the Food and Drink Federation. I should like to thank our Clerk and our specialist adviser for their contributions and my colleagues for their hard work and co-operation.
	We begin by urging governments to work for a conclusion of the Doha round by the end of 2006. In our previous report we talked about the beginning of 2006, but, clearly, that is not on the agenda today. It is very important that the round is finished by the end of 2006, because there is only a narrow window of opportunity before political and legislative factors—above all, the end of the US fast-track authority in 2007—come into play. So, if the round is to be completed, we must get our skates on.
	In our report, we also note the changed landscape of negotiations with the emergence of potential economic superpowers—China, India and other countries such as Brazil. They have formed themselves into a G20 group. There is also the G90 group of the least developed countries. They are a welcome innovation as they help to ensure that the WTO negotiations cannot be accused merely of representing the interests of the rich countries but that they also represent the interests of developing and the least-developed countries. However—this is the other side of the coin—with the increased power to influence the outcome comes responsibility, because it does take two to tango. Just as the EU and the United States, as my noble friend said, must be prepared to put realistic offers on the table, so in the end the G20 and the G90 must be prepared to respond constructively if we are to get a successful Doha round. That is plainly obvious, but it needs saying.
	In our report we discuss how progress can be made at Hong Kong. We accept, as does my noble friend Lord Brennan, that agriculture is the key to unlocking the Doha round. But if a successful round is to be achieved, there must also be movement on the reduction of industrial tariffs. That is in the interests not only of the rich countries and the developing countries, but also of opening up markets in services. I know that my noble friend wants to say something about services later on.
	On the vital issue of market access, we support the EU's offer—it is the third offer, as my noble friend said—to reduce tariffs by 38.9 per cent as being very much a move in the right direction. Of course we expect the EU to lower tariffs further over time, as the CAP reforms kick in and, one hopes, gather momentum. But an EU offer that is higher than that of the Uruguay round is a serious offer and it deserves a serious response. Now we need to see the hand of those other countries that in a sense have been hiding behind the lack of a serious offer from the EU. It has now made a serious offer; now let us see what the others are going to say.
	I should make a point here: not all developing countries, by any means, are in favour of agriculture liberalisation. The ACP countries in particular, as we have seen over the reform of the sugar regime, are understandably very concerned about the erosion of their preferences into EU markets. We consider in our report that it is very important to ensure that these countries do not loose out disproportionately; hence the case for transaction measures, including aid, as compensation. The WTO will need to return to this issue if we are to get a successful conclusion of the round.
	I should like to make a more general point. It picks up on a remark made by Peter Mandelson yesterday to the European Parliament. He said—and this is a sensible point:
	"This is a development round, it is not an agricultural exporters round. The two should not be confused".
	Some countries such as Brazil will do well out of the lowering of agricultural tariffs. They stand to gain a lot from this, but that is not so true of other countries. Those that stand to gain very much from this need to respond when an offer is made by the EU.
	On agricultural export subsidies, we support the EU's offer to remove them, provided others follow suit. We can at least aim for the date of 2010 suggested by the Commission on Africa, which the Government have backed. On that issue, the ball is now in the court of other WTO members.
	So on those two issues, the EU has moved very much in the direction that we suggested in our report in 2004. If significant progress can be made on agriculture, that should open the way for reductions in industrial tariffs and movement on service liberalisation. We have here the outline of a grand bargain but, so far, there has been little movement on industrial tariffs on the other side. The UK trade Minister told us that it would be very helpful if there was now on offer from countries such as Brazil and India. He said:
	"I do not speak Portuguese, but if you read the Brazilian newspapers"—
	I presume that someone translated them for him—
	"it is quite clear that they have got an offer on non-agricultural market access in their back pocket".
	They ought to show their hand. We ought to see the colour of their money".
	What are the realistic prospects for the Hong Kong ministerial round? Roger Liddle told us when he gave evidence that trade ministers had reached a,
	"consensus that it was not possible to get decisive progress without lowering expectations for Hong Kong".
	That is a somewhat complicated sentence. I think he was pointing to the fact that we will not get detailed modalities—I think that that is the technical phrase, which I know the Minister understands very well—in the key areas of negotiation now at Hong Kong. There is not time for that.
	However, we must at least avoid a Cancun-type disaster. After Hong Kong, we need to be in a position to move to complete the Doha round successfully by the end of 2006. At the least, Hong Kong needs to put us in a position to do that. It would be a disaster if the Doha round was to break down. Multilateral negotiations would be seen to have failed and the temptation would be to abandon multilateralism in favour of bilateral and regional agreements. As we stated in our report, it would be a paradox if a breakdown of the Doha round led to bilateral and regional agreements between the major trading blocs—the EU and the United States and, yes, including China and India perhaps—from which developing countries could well be excluded, to their considerable detriment.
	One statistic that is often cited—in a sense, it is a cliché, but it is worth repeating—is that if Africa could secure a 1 per cent increase in its share of world trade, that would account for seven times more than all the world aid that goes to the continent. Therefore, we believe that it is all the more important for developed and developing countries to work for a constructive Hong Kong ministerial and a successful Doha development round.

Lord Haskel: My Lords, I thank my noble friend Lord Radice for his topical report. I see that it was published only today, so it could not be more timely. I also congratulate my noble friend Lord Brennan. He is quite right to be concerned about the prospects for Hong Kong. He is right to be concerned because this is a much more difficult round than the previous one, the Uruguay round, as the noble Lord, Lord Brittan, pointed out. When the Uruguay round was being discussed, the commercial world was a simpler place. Countries could be much more easily characterised as "developing" or "developed"—and the round worked. Countries like India, China and Brazil emerged from the third world. Liberalisation lifted millions of their inhabitants out of poverty. Trade and aid enabled them to modernise their infrastructure, to renew their agriculture and to benefit from globalisation. They created the institutions to participate in the knowledge economy and to play an important role in world trade.
	Today it is much harder. Trade with developing or emerging countries means political and economic pressure not only on developed countries, but also on the poorer countries like Bangladesh or Vietnam. As my noble friend Lord Radice noted, liberalising trade in sugar will hurt the Caribbean as well as East Anglia. So we have a fragmented negotiation: the developed world, the developing world—the G20—and the third world—the G90.
	In addition, we now know a lot more about the effects of trade liberalisation on weaker economies. They have suffered from enforced liberalisation in the past and the result has been instability, inequality and yet more unemployment. We also know more about the effects of protecting the affluent at home. The real cost eventually falls on the lives and standards of living of the poor in third world countries.
	But we know that boosting trade brings its rewards. As Ministers are constantly pointing out—as my noble friend Lord Radice pointed out—increasing Africa's share of world trade by one percentage point would deliver seven times as much benefit as it currently gets out of aid. This is a tempting prospect.
	So there are lots of hopes and fears riding on this meeting in Hong Kong. There is little alignment of interests between participants because the degree of development has become much more varied, particularly over agriculture. It is over agriculture, as other noble Lords have pointed out, where Hong Kong could be bogged down, but perhaps less so, as the noble Lord, Lord Brittan, explained.
	I should like to look beyond agriculture at trade. There seems to be little argument over whether the developed countries should liberalise their markets in favour of third world countries. The main argument seems to be centred around which are the third world countries and whether market liberalisation is good or bad for them. It seems to me that our best chance of achieving the fair and positive outcome which my noble friend Lord Brennan calls for is to try to achieve this outcome at least for the world's poorest countries, and to achieve it through trade liberalisation together with aid for trade. I say this because I believe that liberalisation as opposed to protectionism is in the best interests of even the poorest countries.
	Protectionism means trade barriers, and trade barriers mean a bias towards domestic markets. When India, China and Brazil were emerging they had domestic markets large enough to support businesses which could eventually compete in world markets. This is now rarely true of the poorer countries, especially those in Africa. If their businesses are to flourish, they are going to need exports. This is why Ministers have agreed that tariff reduction is a special aim of the Doha Round Market Access Negotiating Group. Trade barriers are effectively a tax on these exports, which are as likely to be sent to neighbouring countries as to developed countries. These engines of growth help to create larger regional markets and, incidentally, provide opportunities for peaceful co-existence among neighbours. These are the economies of scale which are needed to retain technological and management skills and innovation. This is why Latin American and Asian countries are forming themselves into trading blocks through the regional trade agreements referred to my noble friend Lord Brennan. This is certainly something that we need to encourage in Hong Kong.
	The alternative, of course, is bilateral trade deals. These tend to be more protectionist and more complicated and the weaker country is at a greater disadvantage. Anyway, it has been agreed that the Doha negotiation will end with a single package which everyone will either accept or reject. For these reasons, I think it is right to encourage poorer countries to liberalise their markets in spite of the arguments put forward by the 141 members of the Trade Justice Group.
	But I am against forcing liberalisation. Like my noble friend Lord Brennan, I think that hand in hand with encouraging trade liberalisation must go aid for trade, thereby building capacity to enable free trade. Indeed, the Doha declaration makes special mention of this issue and the Trade and Development Committee has a special responsibility to review it.
	Debt cancellation has been fundamental in that regard. It has made it easier for economic growth to be the basis for lifting people out of poverty, instead of the development diplomacy approach. Trade liberalisation of business goes with economic growth, so does building technical and managerial competence, modernising the infrastructure, and renewing agriculture to improve technical competence and enlarge export opportunities. Such social aid for trade spurs commercial business activity and helps third world countries to move into the modern knowledge economy. Incidentally, it also slows down international migration of skilled and trained personnel from third world countries.
	I echo the call from the Commonwealth summit for developed nations to give more than they receive in this trade round, so that the momentum towards liberalisation of trade with poorer countries is maintained—proper two-way trade, not just access such as the Everything But Arms agreement—because it is the best chance for lifting millions more out of property. That is the most important stated purpose of the Doha round.

The Earl of Sandwich: My Lords, I am very pleased to follow the noble Lord, Lord Haskel, in some of his remarks, because there was some expectation at the Commonwealth Heads of Government Meeting that new concessions could still pave the way for a more satisfactory outcome in Hong Kong.
	However, Malta was overshadowed by the EU's ill-timed announcement of a 36 per cent cut in the sugar price. Not surprisingly, it has caused consternation among African, Caribbean and Pacific countries associated with the European Union, most of which stand to lose millions of pounds in the value of their exports. A similar cut is being made in the banana price.
	The EU Agriculture Commissioner, Mariann Fischer Boel, was quoted as saying that the new deal would make all the difference to the EU's negotiating position at the WTO. That has been echoed today. She may be right in respect of larger developing countries such as India, Brazil and Thailand, and beet farmers in Europe will be generously compensated with up to 64.2 per cent of their lost revenue, but all that will be at the expense of the ACP countries that still depend on single crops such as sugar, cotton and bananas. According to the FAO, 43 of those countries earn more than half their agricultural export revenue from a single agricultural commodity. Forty are LDCs that will have full access under the Everything But Arms agreement, as the noble Lord, Lord Brittan, has mentioned, but even that concession will now be discounted in value.
	The sugar announcement came at an embarrassing time for Britain: just as our own Prime Minister was making a strong plea for trade justice at the conference. Far from expressing fair trade terms such as were envisaged at Cotonou, the European Union has settled for a temporary divide-and-rule policy in which the stronger G20 countries are placated and the weaker G90 go to the wall.
	The NGOs that belong to the Trade Justice campaign are naturally outraged that the European Union is adopting that stance at the expense of poorer countries. Sometimes NGOs are unfairly criticised in Parliament—we have heard it today—for being anti-liberalisation, and on occasion they appear to be against what the WTO stands for. But most development NGOs that I have worked with support the principle of free trade in the right conditions; for example, in countries such as China, which, although a poor country, can because of special circumstances stand up to the winds of globalisation. NGOs are also reminding developed countries of their obligations to their former colonies. In most cases, such associated countries have already had to be protected over a transitional period; now they are being asked, in many cases, to manage without preference and to compete directly in the marketplace. That may be possible only if they continue to receive special and differential treatment over a period. What chance does the Minister think there is of this happening in Hong Kong?
	The European Union has designed a number of schemes to suit the ACPs and LDCs, including the Sugar Protocol, the Economic Partnership Agreements and regional agreements. But as I said during the Commonwealth debate, the EPAs, as currently proposed, have to be WTO-compatible and must reflect reciprocity.
	The latest sugar agreement can only fuel the resentment of these countries and those who advocate fair trade on their behalf, who wonder, rather like the noble Lord, Lord Brennan, whether the so-called Doha development round is still a development round at all if it cannot help the ACP and the other AU countries.
	Ironically, it has been shown by Christian Aid and others that a developing country which receives special treatment and continues to protect its own agriculture can benefit from investment and growth such as to prepare it better for the world market. This has happened in the case of Mozambique. I can remember from two visits how the Mozambique sugar industry was virtually destroyed during the civil war and then again during the floods of February 2000, when many cane plantations were inundated. Then another menace appeared, in the form of the IMF, which recommended that as a condition of further lending, instead of protecting the industry, Mozambique should lower its tariffs and open up to international competition. Mercifully, the World Bank, along with Mauritian and South African investors, stepped in and ultimately the US Treasury lent its weight and persuaded the fund to change its mind.
	Mozambique is still close to the bottom of last year's United Nations Human Development Index, with a life expectancy of below 40. The economy depends largely on the international financial institutions and donors, and the conditions they attach to lending, such as the national poverty reduction plan. Fortunately, the lobby was successful, and these sugar factories and plantations have now been rehabilitated, benefiting more than 20,000 people and dependants in deprived areas of the country where there is no alternative employment. As a result, the industry has received hundreds of millions of dollars in foreign investment.
	When people talk about the benefits of liberalisation, they forget sometimes the utter destitution of the poor in developing countries. They forget that our own infant industries had to be protected throughout the 19th century, and they overlook the fact that while we have a social security safety net for the unemployed, there is nothing like that in developing countries.
	I should like to quote from the statement made at the WTO last July by one of the African, Caribbean and Pacific delegates, Ambassador Ransford Smith from Jamaica. He said:
	"Some . . . believe that development concerns can be taken care of merely through liberalisation, and more liberalisation, and this lays the ground for insufficient attention to issues such as the potential for harming vulnerable domestic industries, and small farmers, the under-estimating of adjustment costs and even of the potential for causing and/or deepening macro-economic imbalances. Unless we act in a focused and sympathetic way to address these matters the development aspect of the round may end up being largely in the nature of a deficit".
	I commend the European Union Committee report mentioned by the noble Lord, Lord Radice, for asking in paragraph 21 on page 13 for "appropriate temporary transition measures" for the least developed and the ACP countries.

Lord O'Neill of Clackmannan: My Lords, I am very pleased to follow the noble Earl. He sought to emphasise an element that we may have passed by this morning—the contribution of the NGOs. On occasion they have a tendency to present themselves in a way where the best becomes the enemy of the good. None the less, we sometimes forget that they are very important spectators—almost participants—in this process. However, I think that recognition was given to them in the report of my noble friend Lord Radice and I congratulate the noble Lord, Lord Brennan, on introducing this topic.
	I am not fully acquainted with the machinations and arcane procedures of this place although I recognise that it is legitimate for an EU Sub-Committee to deal with this topic for two reasons—because the EU has responsibility as the mouthpiece for our trading interests but also, in some respects, because debates within the EU tend to mirror in one form or another debates within the WTO. Bloated agricultural interests seek to deny access to schemes that could be for the benefit of a number of people not only in the European Community but throughout the world as a whole.
	I am also disappointed in some ways at the short-sightedness of countries such as France and the USA. Their unwillingness either to provide access to cheaper agricultural products or to reduce in any serious way the level of subsidy has been a barrier to progress in the past. However, I agree with my honourable friend—sorry, my noble friend: he used to be my honourable friend and still is but not in any official way—that the EU tariff reduction of 38.9 per cent is a helpful step forward. I am reminded of the words of the late George Woodcock who sometimes used to refer to wage deals as shoddy, shabby compromises. While this may not be shoddy, it is certainly a wee bit shabby because I am sure that the EU, if it had the will and the guts, might have gone further, although we know about the internal debates and machinations there. These problems have to be dealt with with a degree of community-wide sensitivity.
	When we are talking about reductions in tariffs, we have to give due weight to the transitional arrangements that have to be made in respect of poorer countries. Reference has already been made this morning to bananas and there are too many such examples. There has to be a degree of flexibility in seeking to achieve a broader-based, rules-based trading system. Certainly, the law of unintended consequence must be taken into account at pretty well every turn.
	We have seen some movement in the past 12 months and it is only fair to give credit to the Government for the movement on the three-legged stool, as it were, of debt reduction, continuing and increasing aid and trying to push the issue of fair trade to the place that it now enjoys on the world's political agenda. While the WTO is often the subject of criticism, one would have to stop and say that, 10 years on, if the WTO did not exist we would have to invent it or something similar to it. I realise that we will have difficulties in the Doha round in securing both the services and agricultural elements within it. If we do not persist in that we will be faced with the alternative of bilateral agreements, which for some people can be a substitute. Indeed, it could be argued that, for some trading groups, it can be a turnkey to access to other groups—such as the bilateral that the EU enjoys with Mercosur in South America, for example. It has limited significance in some ways, but it enables the dialogue to continue.
	What is abundantly clear is that the absence of capability among the poorer nations means that they are unable to enter into any meaningful negotiations of a bilateral character on any basis of equality whatever. They have neither the wealth nor the capability in the form of the army of civil servants that richer countries can bring to bear in the negotiating process. Indeed, it has been argued that one of the difficulties of the WTO is the strength of the strong in these discussions and the weakness of the poorer countries. However, it is encouraging—although I know for some of our negotiators it is a pain in the neck at times—that we have seen the emergence of the G20, the G90 and the ACPs operating as proper units. They do not necessarily come out with the conclusions that we would like, but their interests are different from ours and they have to represent them. It is important for the credibility of the institution that within the institution these bodies emerge.
	When we go into these negotiations in the next few weeks, we must go in with a realistic sense of the difficulties involved—that any optimism that we have may be complicated. I remember once being told by an old WTO hand that these ministerials are somewhat similar to a game of basketball. I am always a bit leery of sporting analogies, but I shall make this fairly narrow in character. Suffice it to say that in a game of basketball, which normally lasts 60 minutes, in the first 56 minutes pretty well nothing of any significance happens; then in the last three and a half minutes all hell breaks loose, and you do not quite know what is happening. The difficulty in Cancun was that the Mexican Minister called time too early; therefore, what was possible in extra time was not taken advantage of. In some respects Doha has been an attempt to limit the damage that was created at Cancun.
	We see a way ahead. But, to finish on a rather sombre point, if we do not get anything out of Hong Kong of a kind that will provide us with a continuing agenda into the early months of next year, we shall come up against the buffer of the United States legislative process and the fact that the fast track procedures will not necessarily be open to us in the way that they are at present. As a consequence, we might find—as we have in post-Kyoto discussions—that one of the most important players and contributors is denied access to proceedings. So we have to go with some speed. In a number of respects, this year has been a period of qualified optimism, not least because of the efforts of the UK Government. I am very hopeful that the impetus that our negotiators have enjoyed in other forums can be repeated in the WTO in the weeks that lie ahead.

Baroness Whitaker: My Lords, my noble friend Lord Brennan, whom I congratulate on securing this splendidly timed debate and on the way he introduced it, touched on the issue of the General Agreement on Trade in Services—GATS. I propose to concentrate on that, not because agriculture is not very important, but because, like my noble friend Lord O'Neill, many noble Lords have rightly focused on it—and also I have bored your Lordships quite often in the past on the subject.
	As the noble Lord, Lord Brittan, said so powerfully, trade in services is increasingly important for developing countries. Even now, it provides about half their GDP. This year's UNDP Report says,
	"poor quality services are a major constraint on human development, growth and trade".
	The World Bank estimates that services liberalisation could provide up to an additional $6 trillion of income to the developing world over 2005 to 2015, which is four times what liberalisation of trade in goods might produce. Reliance on trade in raw materials, the tradition—and trap—imposed on developing countries, will not achieve anything like that, for all sorts of well known inherent and incidental reasons. More productive agriculture alone cannot do it, although it is a necessary jumping-off ground for growth because it is, uniquely, hugely labour intensive. That is one of the things that I have often said. It is the capacity to trade extensively in services that developing countries also need—and this would benefit the rest of the world as well.
	The key purposes of negotiation over the GATS element in the Doha round, as noble Lords know, are, roughly, to expand commitments to provide access to markets, and to reduce discrimination against foreign suppliers. It is immediately obvious that if these purposes are not differently conceived of for the developing from those for the developed world, indigenous services, the interests of the recipients and perhaps the interests of the producers of those services in developing economies are vulnerable to the greater capacity of the service entrepreneurs of the developed world.
	Let us take an example which has brought out perhaps the most vocal critics of the usefulness of the GATS negotiations for developing countries—water. Senegal has already decided to open up the provision of its water supply to the private sector. It is fair to say that this followed pressure from the World Bank and other donors. I am indebted here to research from the Overseas Development Institute, and I declare an interest as a council member. But the Government retained the right to set tariffs and has capped price increases at 3 per cent annually. My own experience of Senegal confirms that people believe that water is expensive, nevertheless, but—and this is a key point—90 per cent of the urban population now has access to clean piped water.
	I draw the following conclusions. First, it is not the GATS system of itself which forces any government to open up any market. But conditionality, for instance of the sort which used to be applied by the World Bank and even more the IMF, does do so. Secondly, prices can go up, and the Government need the capacity to regulate the tariff as well as other capacity to administer the system, and carry out the contractual negotiation in the first place. Thirdly, a government who could not provide enough clean water have now made enormous strides in the provision of a service which is essential for health and prosperity.
	The capacity question is one that we should consider. As many of my noble friends have said—and echoed yesterday by Professor Joseph Stiglitz, the former chief economist of the World Bank—technical assistance must go hand-in-hand with the opening up of trade for developing countries. There must be assistance for governments in the GATS negotiations themselves, in identifying areas that are important for economic growth and development, in the impact assessments that they will need to make and in the capacity to regulate and monitor private sector service delivery. Past opposition criticism of DfID's use of consultants is ill placed, and I hope my noble friend can tell me that there is in fact ample provision to give developing country governments the advice that they ask for in building trade reforms into their own development plans.
	But progress in services negotiations has been slow. Not enough offers have been put on the table. The EC is after mandatory liberalisation targets in each country. Even though the least developed countries could be exempted, that runs quite counter to the proper sense of a market that parties are free to enter into trade as they will and only the eventual agreed contract is binding. And it would surely be damaging to push countries only just above the "least developed" line into the benchmarked list that the EC proposes, no matter what the advantage of starting negotiations from a formula. So, may I encourage my noble friend to persevere in our policy of flexibility?
	Finally, there is a good deal of suspicion about what GATS holds for the developing world. The confidence born of good capacity should allay some of that. But more and better offers should be made by the developed world, so that substantial new business opportunities are created in fields where developing countries can export and technology transfer can be the motor of growth. It works already fairly well with off-shoring and with tourism. It could work extremely well with temporary short-term labour migration, perhaps to the tune of over $150 billion extra income. This would be a win-win situation, because the developed economies need the lower wages, the high skills—and also the unskilled labour, which is less often talked about in the Doha context—which could be on offer. There is also huge potential for infrastructure development, the key to so much more investment.
	I conclude by quoting the international development select committee's opinion:
	"If attention is paid to how GATS works in practice, it could fulfil its promise of being the WTO's most development-friendly agreement".
	Sadly, few of our allies see it like that. Only Sweden, the Netherlands, Denmark, Finland and Austria have joined the UK in focusing on the development benefits of service liberalisation. The need to make progress is urgent, but, even so, progress should not be at the expense of a truly development-friendly agreement.

Baroness Miller of Hendon: My Lords, I congratulate the noble Lord, Lord Brennan, on initiating this debate, which comes on the eve of the Hong Kong round, and also on introducing it so well. It has also been helpful to your Lordships that the European Committee's report in anticipation of the Hong Kong ministerial meeting has been made available today, and I thank the noble Lord, Lord Radice, for his clear explanation of it.
	The WTO negotiations have generated much political hope and much high-sounding rhetoric, but without, so far, producing much of a result for the people whom they are supposed to help. I remind your Lordships that the WTO derives its ancestry from the General Agreement on Tariffs and Trade—GATT—as long ago as 1948. That was supposed to be a temporary measure to pave the way for an international trade organisation. However, its charter was never ratified, and it was only after an endless series of negotiations at various places around the world that the WTO was established. That was in the Uruguay round, which itself lasted for no less that eight years from 1986 to 1994.
	The current round of negotiations began in 2001 and, in my opinion, I regret to say, there is little prospect of a major breakthrough this time either. A cynic would say that all these convoluted debates are an example of international nimbyism. Everyone is agreed that free trade—or even freer trade—would help to lift undeveloped countries out of poverty and, in some cases, famine. However, individual countries—whether it is France protecting its grossly inefficient farmers or the USA, whose every president is in thrall to the powerful agricultural, steel and manufacturing industries—while paying lip service to the concept of reducing protectionism and unfair export subsidies, argue that they should be exempt. I only mention those two countries as examples. The truth is that every country has its own particular niche to protect, and I cannot view with any optimism the possibility of either a great leap forward at Hong Kong, or even a meaningful first step, despite the high-flown rhetoric of the participating governments. Persuading governments to stop trying to protect their own indigenous industries and farmers, is, to quote the well-known cliché, like trying to get turkeys to vote for Christmas. I certainly hope that I am not being too pessimistic.
	An outline deal was scheduled for this July, ahead of the forthcoming Hong Kong meeting. However, deadlock over—your Lordships have guessed it—agriculture meant that there was no outline deal that just needed some tidying up in Hong Kong. The noble Lord, Lord Brennan, mentioned that. The Doha agreement said, in effect, that everything must be agreed, or nothing is agreed. I note that the noble Lord, Lord Radice, said that if we were to get there by the end of 2006, we need to get a move on. It seems that Hong Kong is going to try to reach partial agreements wherever there is a consensus and to set a new deadline for full agreement. The noble Lord, Lord Radice, used the word "modalities", although I was not quite sure what that meant. In other words, the apparent objective at Hong Kong will be to cobble together an agreement on what is to be agreed in the future. I believe that the noble Lord, Lord Radice, said the same thing, but in much more elegant and tactful language.
	As the European Union Committee's report forcefully points out,
	"it is clear that an agreement on NAMA"—
	non-agricultural market access—
	"remains a long way off because there is an objection from developing countries to opening up their . . . markets".
	The committee's report also points outs that agreement on services seems unlikely to be reached in Hong Kong. Both my noble friend Lord Brittan and the noble Baroness, Lady Whitaker, spoke of the importance of getting something to happen with the service industries. The committee urges countries at least to set a target date to make their best and final offers on this important aspect, which is vital to the EU, because 69 per cent of EU economy is based on services. Even as recently as last October, the EU and the United States were proposing separate and different solutions to the question of agricultural liberalisation, covering market access and domestic subsidies. Even within the EU, some member states are described as being unhappy, notably France. There are also differences between the EU and the United States over services and industrial products.
	We also have to ask what the attitude of China will be to the constraints that the WTO will seek to apply to its emerging giant economy. So far, its attitude to issues such as counterfeiting and copyright piracy does not give rise to much optimism. How enthusiastically will EU negotiators press the line that our Government have taken? I quote none other than the Chancellor of the Exchequer, speaking before the G8 conference in June, who said:
	"We cannot any longer ignore what people in the poorest countries will see as our hypocrisy of developed country protectionism".
	I raise this because of different attitudes in different statements by ministers. In an open letter to the Trade Justice Movement, the Secretary of State for Trade and Industry used emotive phrases such as, "no forced liberalisation", a policy which he said the Government supported. In a speech to the Foreign Policy Centre on 20 October, he said,
	"We must not prevent developing countries engaging in deals that could offer huge opportunities. Instead we should pursue policies that require less liberalisation from them than we concede to them".
	The DTI White Paper, which the CBI supported, stated:
	"The evidence shows that those countries which have achieved the biggest reductions of poverty in recent years have been those that have been open to international trade".
	That statement is totally inconsistent with the two passages I have just quoted.
	I ask the Minister, has the Government's policy changed? If it has, when did that happen? What signal do the two statements give about what the Government are going to concede in Hong Kong without getting anything in return? The fact is that developing countries and less-developed countries are constructing and maintaining barriers, even between themselves, but, in a perfect world, seeking international co-operation while looking after number one cannot be the right attitude. But then we do not live in a perfect world, do we? We shall no doubt find that out when we witness the deliberations at Hong Kong.
	The CBI pointed out to the Secretary of State in response to his open letter that,
	"it is essential to recognise that British exporters face significant barriers to trade, including high tariffs, trade restrictions and bureaucracy. These trade barriers benefit no-one and their reduction or elimination would boost UK economic growth. For British companies providing commercial services, significant discrimination and restrictions remain in overseas markets".
	We strongly support a policy of reducing trade barriers to assist poorer countries, but I trust and hope that in the discussions in Hong Kong, the Prime Minister will, in deciding what concessions to make, remember that there is always a price to pay, and that these negotiations must be proper negotiations with give and take.
	I, too, should mention the much-trumpeted recent reduction of sugar subsidies that has been watered down from a proposed reduction of 39 per cent over two years, to 36 per cent over four years. That was raised by the noble Earl, Lord Sandwich, and my noble friend Lord Haskel. I am reminded of the apocryphal prayer, "Lord, make me good, but not just yet". The same applies to the agreement by the EU in 2002 to reduce CAP subsidies. But after the inevitable internal disagreements, spending on CAP is to remain the same until 2013. Even then, according to Oxfam, the proposals will not make a big enough difference and that overproduction will result in the equally objectionable process of dumping.
	My right honourable friend the Leader of the Opposition said last April:
	"The potential [of the WTO] to help the poorest countries of the world is not being realised. The developed countries are still too protectionist. Western tariffs and farm subsidies reduce the export earnings of developing countries by . . . $39 billion a year, 50 per cent more than they receive in aid".
	I speak of "hope". We can only hope that the outcome of the forthcoming round of negotiations in Hong Kong will in fact reach a high proportion of the objectives set for them. It is also to be hoped that progress will be made in the field of non-trade concerns, such as environmental protection, food security and rural development. And, personally, I can only hope that when we come to discuss the outcome of those talks, as we surely shall after they conclude, my admittedly pessimistic views will be proved to be unfounded and I shall be able to congratulate the Government and the other participants at Hong Kong on a positive result.

Lord Sainsbury of Turville: My Lords, I am delighted to take part in this debate today. I thank my noble friend Lord Brennan for raising this issue at such a critical time. The next major milestone in the DDA—the Hong Kong ministerial conference—is less than two weeks away. I also thank my noble friend Lord Radice for the excellent report of the European Union Committee into prospects for the ministerial conference.
	We all know how important the DDA is. The stakes are high. Trade increases prosperity, and prosperity gives people and nations a stake in the future. This round has the potential to deliver more than $200 billion in global gains. As my noble friend Lord Haskel pointed out, the UK has used its two presidencies this year to focus attention on Africa, and we should continue to do so in Hong Kong. The figure that I have is slightly different from that quoted by my noble friend Lord Radice but I think that it is the same as that given by the noble Lord, Lord Cobbold. It is that a 1 per cent increase in Africa's share of world trade would benefit Africa by more than $70 billion, and that is three times the aid increase agreed at Gleneagles. But the point is the same.
	Developing countries could gain $47 billion in increased agricultural exports. But it is not just the poor countries of the world that will benefit from a comprehensive and ambitious Doha round. From non-agricultural market access alone, Europe could gain €20 billion a year.
	The Prime Minister, in his speech on 14 November, emphasised that an ambitious trade deal is a priority for the UK. We need a comprehensive, ambitious agreement to cut barriers to trade in the three key areas: agriculture, non-agricultural market access and services. The aim of the Hong Kong ministerial conference must be to create the conditions so that, by the end of 2006, we can get there.
	In Geneva tomorrow, the WTO membership is set to agree the texts to take to Hong Kong. Over the past month, Pascal Lamy, the WTO director-general, has been managing expectations for Hong Kong. Key WTO members remain some distance apart on important areas, and Lamy has stated that his overriding aim is to ensure that Hong Kong is not a failure. He also wants to ensure that an agreement there locks any progress that has been made since the framework agreement last summer. That approach will, in all likelihood, mean that another ministerial conference early next year—commonly referred to as "Hong Kong 2"—will be needed to finalise dates and figures.
	In this vein, chairs across the different areas of negotiation have produced reports that summarise the state of negotiations and provide some tentative suggestions of areas of possible convergence. Consistent with their mandate, there are few surprises in the reports. This is a low-risk strategy, which has the advantage of lowering the chances of a repeat of Cancun. But the critical question will be whether Hong Kong can set up the conditions for conclusion next year. That is why, as I will mention in a few moments, we will continue to press WTO members to keep expectations high for Hong Kong. The agreed texts need to be the starting point for negotiations at the ministerial conference—not the negotiations' end point.
	A successful Hong Kong will require progress across the breadth of the DDA negotiations. Much time and energy is focused on agricultural negotiations, and I thank my noble friend Lady Whitaker for reminding us of the importance of services to developing countries. She is correct in identifying that technical assistance must go hand in hand with opening trade to developing countries.
	Noble Lords may be interested to learn about three projects that the UK Government are funding to increase trade capacity in services. The first, which is being carried out by UNCTAD, is aimed at assisting the integration of developing countries in global services trade through ensuring adequate impact assessments of developing country import and export interests. That is a crucial tool in helping developing countries to negotiate from a position of informed strength.
	The second is a capacity-building project, undertaken by UNCTAD and the World Bank, which is focused on expanding developing country capacity to negotiate and schedule meaningful requests and offers. It is a technical issue that requires particular expertise and experience.
	The third is a specific commitment to the South African Government from the UK Government to provide £100,000 to aid consultation between ministries, regulators, business and consumers to assist in assessing when, where and how to open up the domestic service sector to foreign competition. This serves to illustrate that the Government are committed to providing developing countries with the tools that they need to participate effectively in trade negotiations. Developing countries are increasingly telling us that, together with financial assistance, they require assistance in gathering knowledge and understanding of their own domestic industries to build negotiating capacity. More generally, development is at the heart of the UK's distinctive trade philosophy, as set out in the July 2004 White Paper, Making Globalisation a Force for Good.
	A key element of the development debate, on which the Make Poverty History campaign this year has concentrated and which my noble friend Lord Haskel covered so eloquently, is the extent to which developing countries should be forced to liberalise. Liberalisation has the potential to deliver huge gains for both developed and developing countries. But if it is done too quickly, it can be disruptive, as was seen with the shock treatment meted out by the IMF and the World Bank in the 1980s. I agree with my noble friend Lord Haskel that we should make the case for liberalisation to developing countries. Liberalisation is not only a north-south issue; it is also a south-south issue.
	It should also be said that liberalisation and increased prosperity never come without some economic disruption. However, I am afraid that I cannot agree with the comments of the noble Lord, Lord Christopher, about free trade and textiles trade. If you look across the world, you will see the huge benefits that have come to many developing countries, such as Vietnam, China and Bangladesh—some of the world's poorest countries—from being able to access markets in Europe with their products. I would argue that the disruption that we have seen recently comes mainly from the fact that we have maintained protection in Europe for too long. Suddenly removing that protection brings with it obvious economic disruption.
	I agree with my noble friend Lord Haskel that we should make the case for liberalisation in developing countries, but it is for developing countries to make their own decisions on the timing, pace, sequencing and product coverage of any market opening in line with their own national development plans and poverty reduction strategies.
	As we have set out, we will not force liberalisation on developing countries through aid conditionality or trade negotiations. We should move away from a mindset where market opening by developed countries is seen as a "concession" to be traded for access to developing country markets. I hope that that nuanced and carefully balanced policy is now clear to the noble Baroness, Lady Miller.
	I also want to use this opportunity to mention aid-for-trade proposals, which the Government have done so much to advance through the Gleneagles Summit. As set out in the Commission for Africa report, it is not enough for poor countries to have increased access to markets abroad. They also need support to build the capacity to take advantage of those new trading opportunities. The EU is the biggest provider of trade-related assistance worldwide by far. Earlier this year, President Barroso pledged to increase aid for trade to €1 billion a year, and last month the Prime Minister pledged to treble UK trade-related aid to £100 million a year by 2010. We will be pressing others to make similar pledges to help to ensure that poorer countries gain from the Doha agreement.
	Before I turn to what the Government are doing to help to ensure a successful outcome at Hong Kong, I would like to comment on the excellent report on prospects for the ministerial conference produced by the European Union Committee. As it was published only today, I will not make a detailed response. However, I wish to compliment noble Lords on the production of a timely report and give my broad support to their conclusions. In particular, I welcome the call to end export subsidies by 2010 and to agree a date for final offers on services.
	In terms of negotiating dynamics, it is clear that developed countries must play a leading role in removing their trade distorting support. But, as the report and the noble Lords, Lord Brennan and Lord Brittan, point out, advanced developing countries such as Brazil and India also now need to play their part. The state of negotiations makes it clear that all parties need to turn over their cards in the next few weeks and months.
	The Government are working hard to deliver a successful outcome to the DDA. As we are all aware, the UK is an active player in trade policy and champion of the multilateral trading system. The UK has continued to play an active role in the EU and beyond. The UK has consistently made the case for bold steps in DDA negotiations, such as the EU's offer in May 2004 to eliminate export subsidies. And we will be using our presidency of the EU to help to deliver a progressive European position at Hong Kong.
	The UK has used its presidency of the G8 in 2005 to highlight aid, trade and debt. A statement on trade at Gleneagles in July helped to display the level of commitment from world leaders to an ambitious conclusion to the DDA and highlighted the need for aid for trade for poorer countries. The UK has also been making the case for the development of an effective package of trade-related technical assistance and capacity building to help unlock the development benefits offered by the DDA.
	We will maintain this effort and continue to press other WTO members to work together for as much progress as possible in Hong Kong. We must see agreement to a package that will allow conclusion of the round by 2006 and which both genuinely delivers on development and helps to build a more competitive European economy. As my noble friend Lord Radice said, that is essential as US fast-track authority expires in 2007. We have a strong team heading out to Hong Kong headed by the Secretary of State for Trade and Industry, accompanied by the Secretaries of State for Environment, Food and Rural Affairs and International Development and the Minister for Trade.
	I shall now deal with the few specific points that were raised during the debate. My noble friend Lord Brennan spoke of the cotton initiative. Cotton is a key example of a crop where unfair competition from subsidised production predominately in the US, but also in the EU, is undermining the development potential of competitive cotton farmers in west Africa. The development impact of cotton subsidies is widely acknowledged and the subject of a special initiative in the WTO, driven by four west African LDCs, Benin, Burkina Faso, Chad and Mali. The UK strongly supports the EU proposed fast-track initiative in the WTO on cotton to eliminate all trade-distorting support given to producers in developing countries and to offer duty-free access to the least developed countries. Progress has been slow and at Hong Kong we want to see progress on the WTO cotton sector initiative.
	The noble Earl, Lord Sandwich, spoke about the sugar regime. The sugar regime has not been reformed for more than 40 years and European sugar prices are three times world levels. We do not have a choice on this issue. Reform is necessitated by a WTO panel ruling on a case brought by Australia, Brazil and Thailand. ACP producers will still enjoy European prices at two times world levels. I have a certain sympathy with Peter Mandelson's statement that he is pressurised to liberalise agriculture and then criticised when the Commission does so. We need, as the UK is doing, to push for an adequate transitional package for those countries affected. Adequate transitional assistance is necessary to send the right message to the ACP ahead of Hong Kong.
	My noble friend Lord Judd had a list of relevant and important questions. I shall deal with them quickly. First, on the end date for export subsidies, we totally agree with that. Government policy is to agree an end date of 2010 for agricultural export subsidies and we shall press for solution of that issue at Hong Kong. Secondly, he asked about action on subsidies, especially on cotton. I have already dealt with cotton in that regard and we support the Commission proposal to fast track implementation of commitments on cotton. Thirdly, he asked about increased market access, particularly duty-free and quota-free access for LDCs. Yes, we agree on that. The Everything But Arms agreement of 2001 granted duty-free and quota-free access to the EU and we shall be pressing all developed and developing countries in a position to do so to follow suit. Fourthly, he mentioned special and differential treatment for developing countries. We agree that special and differential treatment is a crucial element of negotiations. As the Government have set out, we will not force liberalisation through either aid conditionality or trade negotiations, allowing developing countries to plan and sequence reforms. Finally, he asked about the move away from the culture of trade-offs in negotiations. In the White Paper of 2004 the UK Government rejected that a mercantilist approach of treating reforms as concessions to be traded off. The noble Lord is correct in saying that the UK is a minority in that regard.
	The reality in Geneva, as noble Lords have recognised, is that all members need to use Lamy's phrase, to share the political pain. There is agreement that developed countries should take most of the pain but advanced developing countries need to show their willingness to make some limited movement as well. Is a bad deal worse than no deal? We should remember that we have seen substantial progress on delivering the Doha mandate. We must not overlook that. The EU has offered to reduce its trade distorting domestic support by 70 per cent and average tariffs by 38.9 per cent. The deal must deliver a development and the voting arrangement of one member one vote means that a deal that does not deliver on development could be vetoed by any of the 149 members.
	What can we realistically expect Hong Kong to deliver? Your Lordships will have seen the push to reduce the ambitions for the Hong Kong conference. We are uncomfortable with that. The 2006 deadline remains. The same politicians will be in the same seats next year. It is hard to see how conditions early next year will be better than they are now. The bottom line is that some tough political decisions have to be made and we are pressing for them to be taken at Hong Kong. At Hong Kong the easy choice will be a lowest-common-denominator outcome. We need to aim higher—much higher indeed. All WTO members need to make a huge effort to get the process back on track. No one wants Hong Kong to fail and, most importantly, very few want to reduce the level of ambition for the round, but if we are to succeed it will require more than goodwill and ambition. It will also require vision, enlightened self-interest and the willingness of all countries to take tough decisions.

Baroness Morgan of Drefelin: rose to call attention to the Government's policies on social inclusion; and to move for Papers.
	My Lords, I am delighted that we are having this debate today—if a little earlier than expected—and that so many noble Lords are taking part. Social exclusion is a real blight upon this country. It wastes lives and taxpayers' money. Progress has been made since 1997, but tackling social exclusion and promoting social inclusion is as important today as it was then. Social exclusion still matters to more than 4 million people living in families where no one works and to the one in 10 children who grow up experiencing severe poverty.
	I believe that social exclusion can and must be tackled. This Government have committed to building a stronger, fairer Britain. Tackling social exclusion is at the heart of that, and I believe that your Lordships' House has an important duty to scrutinise this central plank of government policy, to examine progress and to debate the key challenges ahead.
	The Government have taken some important steps forward. Economic stability and growth, plus a strategy to make work pay and support for the most vulnerable have added up to some impressive figures for the Government. There are 2 million more people in work, 700,000 fewer children in poverty, 400,000 fewer children living in workless households and 700,000 fewer pensioners in poverty today. There can be no doubt that that has helped some of the worst off. On Tuesday, my honourable friend the Minister for Local Government, Phil Woolas MP, stated that there are now 1.1 million fewer socially excluded people than in 1997. However, that leaves more than 3.5 million, or 5.2 per cent, of the working-age population still excluded. That gives us some sense of scale of the problem we face.
	I am sure that the term "social exclusion" has many academic definitions but, for me, social exclusion describes situations where people and their families are experiencing problems so severe that they cannot take part in normal life. In other words, if we set a minimum standard for the things in life we take for granted, social exclusion is life below that level. Social exclusion is a difficult concept, because it does not refer simply to one dimension of life, such as income. It occurs when people become overwhelmed by problems and lose their ability to cope with the shocks that life throws up. Experiencing a problem in one area of your life can make you more vulnerable in another. You lose your job, so you have a lower income. That might mean moving to cheaper housing in an area with higher crime and fewer job prospects, and so the cycle goes on.
	The Government's Social Exclusion Unit defines social exclusion as being,
	"when people or places suffer from a series of problems such as unemployment, discrimination, poor skills, low incomes, poor housing, high crime, ill health and family breakdown".
	The scope of social exclusion is wide open, encompassing almost all areas of life. Factors that trigger exclusion are not conveniently located in one departmental remit or policy area. One of the main reasons that the Social Exclusion Unit is such a crucial resource is that it can take a wider perspective. Its recent report, Breaking the Cycle, highlights five key areas in need of further attention if the Government are to reach the millions left behind. I imagine that your Lordships may wish to add to this list today.
	The first key area is inequalities in educational attainment. We know that poor educational attainment can lead to poor employment prospects and low income. The second is being out of work. Worklessness is increasingly concentrated in the same locations and households. It is a key factor driving child poverty, which we know can pass from generation to generation. The third is homelessness. Lacking a permanent address leads to difficulties getting a job or opening a bank account. Homelessness also leads to problems with mental and physical health and well-being. The next key area is crime and fear of crime, which is most likely to affect the most disadvantaged people in the most deprived areas. The final key area is health inequalities. I hope that we can tease out some of the factors that link these issues and how they impact on some people and places more acutely than others and can begin to look at ways to push the debate forward and make real progress.
	I now want to outline my personal concerns. I bring to this debate a background as a patient advocate, and I am particularly concerned by the appalling health inequalities that we see in the UK today. Health and well-being profoundly affect quality of life and opportunity, but experiences of health and well-being are very different, depending upon an individual's social and ethnic background, region or even neighbourhood. For instance, in the short distance between Westminster and Canning Town on the Jubilee Line there are six stops and the average lifespan of the population drops a year at each. South Asians in this country are 50 per cent more likely to die of coronary heart disease than anyone else. Men in unskilled manual occupations can expect to live seven years less than their professional counterparts. Some of these inequalities are increasing. The gap in infant mortality rates between the lowest and highest social classes increased from 13 per cent to 19 per cent in the short time between 1997 and 1999. The equivalent gap in life expectancy has risen by 5.7 per cent for women and 1.4 per cent for men.
	Tackling health inequalities has been a priority for the Government since 1997, and there are key targets in place. The 1999 White Paper, Saving Lives: Our Healthier Nation, set national targets to combat particular diseases across the population. We now have floor targets to close the gap in mortality rates from key killer diseases between disadvantaged areas and the rest of the country by 40 per cent by 2010. In addition, Tackling Health Inequalities A Programme of Action, was published in 2003. It set out 12 headline indicators, and progress against them was assessed in a report published in August this year. At the top of the list of the indicators we find increased survival of the big killers: cancer and heart disease. Data take time to collect and are particularly poor with regard to black and ethnic minority groups and people with disabilities, so it is not always easy to assess how progress is being made. Although inequalities persist and grow, experts suggest that we have made progress against some of the wider causes of ill-health and that, in time, this may reverse the trend.
	As I have said, top of the Government's list of headline indicators that underpin these targets is a reduction in cancer mortality. I should like to take a few moments to discuss that in more detail in order to illustrate the enormity of the task and the diversity of the challenge in public health.
	Cancer affects one in three of us in this country, and there is a clear association between survival chances and affluence. On the one hand, there is great news: cancer survival rates are increasing for all sections of the population, but they are increasing faster in the most affluent rather than in the deprived groups.Vital research by the charity Cancer Research UK shows that exposure to cancer risk factors varies across socio-economic groups and that smoking is the biggest cause of inequalities in cancer incidence and survival. Smoking causes one in four cancer deaths and nine out of 10 cases of lung cancer, but it also increases the risk of cancer of the bladder, cervix, kidney, larynx, mouth, oesophagus, pancreas, stomach and some types of leukaemia.
	Around 15 per cent of the most affluent smoke as apposed to around 45 per cent of the least well off. But, most importantly, 70 per cent of all smokers want to quit. We know that the Government's smoking cessation programmes are reaching people living in deprivation, but, not surprisingly, people with tough lives find it harder to quit.
	I believe that all the Government's public health policies should tackle health inequalities. Therefore, I await with interest the arrival of the Health Bill into your Lordships' House in order to understand how this new raft of policies will reduce health inequalities. I believe that health inequalities also stem from unacceptable delays in diagnosis and unequal access to services. I see this as a key point, which needs greater attention. For example, in cancer, we know that the uptake of screening in deprived groups is poor. The National Audit Office recently reported that certain groups, including older people and people from deprived areas, are more likely to present with cancer at a later stage than the general population—with all the effects of survival that entails. While we would like to believe that once someone enters the system they will get the best treatment, regardless of their affluence, this may be far from the truth. For example, women with breast cancer from deprived groups are much more likely to undergo radical mastectomies rather then the more modern breast conservation surgery.
	I am concerned that if we are to achieve the hugely stretching targets the Government have set for reducing health inequalities, we need to integrate public health initiatives and priorities into the core of other department agendas. The ODPM is key in that because of its focus on location and community engagement in deprived areas. Yes, we need a comprehensive smoking strategy and to promote diet and lifestyle changes in the population, but to reach these targets we need to address the problems of the worst off in the worst performing areas. That means improving early diagnosis of the big killers in hard-to-reach groups in deprived neighbourhoods through better access to services and better outreach into the community.
	Sadly, there is remarkably little evidence of what works well, but I believe that the voluntary and community sector and some PCTs are leading the way. For example, this week we heard that Cancer Research UK has launched a major targeted campaign to raise awareness of mouth cancer in disadvantaged groups starting in Tower Hamlets and Gateshead where survival could jump from 50 per cent to 90 per cent with early diagnosis, and all the benefits and quality of life that that could bring.
	Dr Foster, in partnership with the Department of Health, has developed a tool for identifying specific locations at high risk and a methodology for engaging and energising local communities to self educate. They have had great results in Slough, working with the Asian population at risk of diabetes, and are now working in East London on breast cancer and in Brent on teenage pregnancy—a very important issue for our discussions today.
	The Big Lottery Fund, for example, has supported a number of innovative projects. The lessons from these initiatives seem to be that involving diverse communities is vital and tightly targeted interventions are necessary to make an impact. If there is read-across from these ideas through into other disease areas, it is clear to us all that there is a huge challenge in tackling health inequalities in this country. So we need a better understanding and a common approach to these issues. We must ensure that we act decisively through all departments, not just the Department of Health.
	I have concentrated on health issues, as I would, but even so I have not had time to touch on issues such as AIDS, as it is World AIDS Day today, mental health or childhood obesity—big issues for this subject. But we must move on because there is not time and I want everyone to have time for this discussion.
	There are many reasons why people become disadvantaged and excluded. There are complex inter-relationships between factors, and I know that speakers will want to raise those. I look forward to a challenging debate and I hope that we can give my noble friend the Minister some real food for thought in this vital area of government policy. I beg to move for Papers.

Baroness Henig: My Lords, I, too, congratulate the noble Baroness, Lady Morgan, on initiating this debate. One of the most important responsibilities facing any modern government is to frame policies that promote social inclusion. We have seen all too graphically, both in this country and very recently abroad, what happens when groups feel so marginalised, alienated and dispossessed that they take the law into their own hands. That is why I welcome this debate. I know from my work as a Lancashire county councillor and as chair and now president of the Association of Police Authorities how much good work is going on up and down the country to combat social exclusion and promote community cohesion.
	The role of governments in this important arena is to create a framework of policies at national level to help the most vulnerable and marginalised groups in society and to promote social inclusion and social integration while at the same time celebrating diversity and cultural difference. A lot has been done at national level in the past eight years, but I want to focus on how these policies are being delivered up and down the country and on what impact they are having. Good policies are important, but unless they are effectively delivered on the ground to communities and families, we will not achieve the levels of social inclusion that we all want to see.
	One of the most important developments over the past 10 years at local government level has been the development of a network of welfare rights advisory services across the country. These offer practical help and advice on benefits and allowances tailored particularly to those who most need help and are least likely to know where to find it. Welfare rights officers have developed imaginative and hard-hitting projects to reach the disabled, those who care for them, other vulnerable groups, the desperately poor—whether single mothers or elderly pensioners—and ethnic groups.
	Examples of that work include the Children with Disabilities project run by Hertfordshire Money Advice Unit, which maximises benefit income for the families of children with disabilities, and outreach work in Bristol relating to disability benefits among ethnic communities, which uses interpreters to provide information and help with claims. Tameside, like other authorities, runs a very comprehensive welfare rights service. But I was particularly struck by its post of Macmillan welfare rights officer, developed in partnership with the primary care trust and Macmillan Cancer Relief. The main source of referrals is Macmillan nurses and district nurses. That strong partnership enables those who face critical and debilitating health challenges to access the financial and other help that is available. Tameside also has a Visual First Welfare Rights Officer to ensure that all newly registered blind people get a benefit check and the help and support that they need to make claims and to access help.
	People who suffer from mental health problems are particularly vulnerable in our modem society even though there are so many innovative care in the community initiatives. It is particularly important that police officers in custody suites are properly trained to deal with potential offenders who have mental health problems and that they have close links with health authorities. So often the solution to what seems like offending behaviour is medical help. Having nurses in custody suites to help with mental health and drug problems has been invaluable in diagnosing individual problems and endeavouring to find appropriate treatment programmes—a practice which needs to be extended.
	Engagement in sport has proved a particularly effective way of helping disadvantaged and disabled young people. The programme run from the Royal School for the Deaf and Behaviour Disorders in Cheadle for a summer sports camp with 500 able-bodied young people and 500 disabled youngsters—organised with the help of Sport England and local grants—has been such a success that, next year, it will be expanded to three weeks. Using sport as a vehicle for constructive engagement is also true of schemes across local authorities. In Burnley, for example, the mentoring of young offenders and those vulnerable to crime on a one-to-one basis and engaging them through sporting activity not only helps them to integrate into society and become more responsible young citizens; it then uses their skills to reach out to help other youngsters in trouble.
	In that context, I should like to pay tribute to large numbers of police officers and other uniformed personnel across the country who organise sporting activities, often in their own time and run on money raised by volunteers, to help disadvantaged and alienated youngsters from a range of different backgrounds. I have been particularly impressed with recent initiatives launched in the north-west working with prisoners to address their problems and to help them reintegrate back into society and reduce the risks of their reoffending. The Step-On project which operates across Liverpool and Manchester prisons works intensively to help secure accommodation and work for ex-prisoners and to support them in addressing their problems. There are other such initiatives, involving a wide range of partners, operating at other prisons. These initiatives then link with community programmes that help ex-offenders to secure work placements and equip them first—if they need them, and often they do—with basic skills to help them, once they have a job, to keep it.
	Operation Pier in the Wirral has police, probation, health, the local authority and housing working with prolific and persistent offenders to help them change their ways and become part of the community. In the past two years, 120 prolific offenders have so far passed through that programme with a great deal of success.
	I would particularly like to highlight the role of regional offices up and down the country which liaise with local councils and strategic and community safety partnerships to spread ideas and good practice and target funding. They act as a bridge between central and local government, and regional directors have contributed very effectively and enthusiastically to social inclusion agendas. In turn, they have identified problems and obstacles to progress and reported those back to central government. In particular, in Oldham and Burnley a number of important community and voluntary initiatives have been launched since the riots of 2001. It is particularly encouraging to note the activities of the young people in those areas, working across communities, through youth councils and other networks, and seeking to learn lessons and mediation skills. Many of them have gone to Northern Ireland and worked closely with people there to learn from their experiences.
	Another important area of activity has been combating drug abuse and promoting drug rehabilitation schemes, such as Tower in Blackpool. It started under the auspices of the local community safety partnership, but has grown into one of the country's leading models for helping offenders with serious drug problems to combat addiction.
	I end by citing an example of good practice which I think is particularly instructive. The Homeshield partnership, run by Suffolk County Council in partnership with community safety, fire, trading standards, district councils and the voluntary sector, is aimed at helping people to access benefits to which they may be entitled. But it triggers referrals to partner organisations about other problems that individuals may experience. That of course underlines the fact referred to by my noble friend Lady Morgan that vulnerable individuals or families typically face not just one problem but a whole series. Getting partners to work together to help to find solutions is absolutely essential.
	That leads me to two conclusions. The most innovative and effective work is going on in the places where a wide variety of partnerships are able to work together closely, and where individuals have good networks of contacts to drive forward results on the ground. There are many examples from across the country, and often their biggest problem is that government departments are not as joined up in their funding and performance monitoring and assessment programmes as they are. Thus they can face conflicting requirements from different government departments and many layers of bureaucracy, causing frustration and the undermining of performance. These issues need to be addressed.
	My second conclusion is that I would like to see much more acknowledgment by central government of the great variety of work going on at the grassroots level to promote social inclusion and community cohesion, and the development of much closer working relations with mainstream good practice. In particular, I should like to see civil servants in government departments take more secondments at the local or regional level, and the promotion of a greater interchange of personnel in general. This would help to spread and mainstream good practice more quickly, as well as assist government officials to understand more clearly what obstacles local partnerships and voluntary organisations face, and how they can be helped to deliver government policies even more effectively.
	I think that much has been done, but I agree with my noble friend Lady Morgan that much more remains to be done.

Lord Dahrendorf: My Lords, the noble Baroness, Lady Massey, like most of the speakers before her, has spoken from a depth of experience that I cannot claim to have. I shall therefore offer one or two more general reflections, which I hope may be helpful.
	One of the reasons why I am very grateful to the noble Baroness, Lady Morgan of Drefelin, for initiating the debate is the language that she employed. It is the language that this Government have used from the beginning: that of exclusion and inclusion. I have no doubt that that terminology is preferable to that of equality and inequality. The terminology of equality simply describes people in terms of where they are, while the terminology of exclusion and inclusion describes people in terms of what they can do and how they participate in the life that our societies, political communities and economies have to offer. Life chances are, after all, chances of participation.
	I sound one cautionary note: governments can combat exclusion, and from the beginning the present Government have definitely set out to do just that, but they cannot bring about the inclusion of everybody in all areas of participation, nor should they try. The total inclusion of every person in everything going on is an almost totalitarian notion. One can try to provide chances, but I do not believe in the attempt to make people do what the chances offer. For instance, I am a strong opponent of compulsory voting and would be quite prepared to make the case that I hinted at in those terms. What matters are chances of exclusion and of participation.
	There are three major areas of participation that are particularly significant and where exclusion is particularly dramatic. The first is the political process. When I whispered to my noble friend Lord Weatherill, who is no longer in his place, what I was going to say, he said that he would leave immediately. When he was the Speaker of the other place, he initiated a process of understanding citizenship better. Not only does that process affect large parts of the education system but, as the noble Baroness, Lady Howells, said, the crucial subject of Britishness is part of the notion of citizenship. Advancing citizenship as a value and understanding it better, including what shared values go with it, is part of the battle against exclusion, although that is very difficult at this time, when so many turn away from the political process and feel disenchanted.
	The second major area of participation is the economic process. That means access to the labour market, which in turn means education; that is to say, preparation for the labour market.
	My next point is without polemical intent but concerns me quite greatly. This Government have shown an extraordinary insistence on what is sometimes called and often implied to be meritocracy, on training people to actively participate in the knowledge society. Their objectives include getting 50 per cent or 55 per cent into higher education. I have long been concerned with that strong emphasis on meritocracy and on those who are led to higher education. I have never forgotten the great work that the late Lord Young of Dartington wrote 40 years ago on a negative utopia. It was a horror story of what it means if one is too obsessed with those who go furthest in education.
	The world in which we live and in which we are going to live—indeed, the economic universe in which we are going to live—is not just one where people have doctorates, Masters' degrees or even Bachelors' degrees. It has a whole variety of requirements and opportunities. My own sense has for some time been that when one talks about inclusion in the labour market and in the economic process, it is as important to concentrate on vocational training and apprenticeships for all as it is to concentrate on expanding the university population. For me, one major issue in terms of inclusion would be a greater concentration on those areas of education which may ultimately lead to higher education, but which may not, and which are available to all and encourage all.
	The third major dimension of participation is that of civil society—the associations in which we happily live our lives and in which we can do things for others and often do. I know that the Chancellor of the Exchequer has had a major interest in this area, particularly in volunteering. I also know that he, like many others, was disappointed that when he looked at the facts, he found it was often those who were quite integrated in society who volunteered. Volunteering was an offer that was not taken up by the excluded, although it was often intended to be for them.
	I do not know what the answer is. I am, as your Lordships may have gathered from my earlier comments, an opponent of compulsion by governments, but it seems to me that some voluntary national social service would not be the worst idea to discuss as one considers how participation in the associations of civil society can be encouraged.
	I conclude with something I feel strongly about. So far as creating an inclusive public sphere is concerned, I believe that the United Kingdom is doing better than any other European country. There is reason to be proud of the way in which the public sphere has become inclusive. This debate and its participants could not be rivalled in any other country of Europe, I know. It is one of many examples of success in an area in which undoubtedly more can be done.

Lord Corbett of Castle Vale: My Lords, it is a pleasure to follow the noble Lord, Lord Dahrendorf. I am not sure whether he saw my notes or I saw his, but he will recognise some of the themes that I shall discuss. I also congratulate my noble friend Lady Morgan and thank her for picking this subject for debate.
	I have had the fascinating pleasure of involvement in a 12-year exercise in social inclusion in a part of my former Birmingham constituency at Castle Vale. I want to use these few minutes almost as a case study about what has happened during those 12 years, especially to the people involved.
	Here was a run-down sink estate, with 34 tower blocks, where one in four people of working age was jobless and which was in the poorest 10 per cent of areas in England for income, jobs, education, skills and training. One in 10 of those of working age was classed as sick or disabled, twice the England and Wales average. Crime was rampant, including burglary, robbery—the poor robbed the poor; colleagues on this side of the House in particular will recognise that—and car theft. Led by a housing action trust—I pay tribute to the Conservative Party for setting such trusts up—and on the back of about £205 million of public investment and £117 million of private investment, residents at Castle Vale have rebuilt not simply their homes but their hopes and life chances as well.
	Those jobless of working age are now around five in every 100, less than the all-Birmingham average, against the 26 in 100 in 1993. The HAT has helped to create 1,461 jobs. Many walk to work at two new shopping centres, an enterprise park and new health facilities. Educational attainment has soared. Now one pupil in three achieves five A* to C GCSE passes, against one in 13 in 1994. People on the Vale live an average seven years longer than they did in 1992. And the savage scar of crime has seen offences cut since 2000 by 36 in 100, making the Vale one of the safest places in Birmingham and the West Midlands in which to live.
	The key to this success is simple, and it is obvious that it was not done early enough. The approach of the housing action trust was holistic, recognising that social, economic, physical and community safety issues are inter-related and cannot be successfully tackled alone. Some on Birmingham City Council wanted the 250 million quid which was on offer from the Government given to the council so they could pepperpot it around the city. On the back of my experience in my constituency, with dollops of a million here and two million there, I know that if you go back two or three years later to where it was spent, you cannot see what happened to it. We now know that it is a waste of public funds simply to refurbish a tower block and leave the occupants out of work with no access to training and their children sitting in inadequate schools that are starved of the cash and resources they need.
	I do not want to give the impression that the job has been completely done—it has not. It is a continuing process because that is what sustainability is all about. My title is Corbett of Castle Vale as a thank you to the people of that area for what they have individually and collectively achieved over the past 12 years. It would not have been achieved had it been done on a hotch-potch basis.
	The largest remaining problem for the people of the Vale—there are 10,000 souls living there—is that 90 in every 100 young people still leave school at or before the age of 16. There are significant numbers of young people over 16 who are not in education, not in jobs and not in training. They are under-achieving and denying themselves access to the skills they need to take advantage of the jobs waiting to be done. You have only to look at the skyline of the city of Birmingham to see the hundreds and thousands of jobs on offer in the construction industry, for example. Those young people could get the skills and the training near to where they live so they could get those jobs.
	This, then, is the challenge being tackled by the Castle Vale Neighbourhood Partnership Board, which I am pleased to chair. This is the successor body to the housing action trust, and links the principal service providers—Birmingham City Council, West Midlands Police, Josiah Mason College, the primary care trust and others—with the elected resident representatives. For the first time anywhere in the country, to my knowledge, the providers have set down in detail the services and the level of services they will provide over the next five years. The residents are there to see that that is delivered.
	The board's education, training and employment group aims to provide high quality learning and skills opportunities to open the road to personal fulfilment, effective community engagement and to meet the demands of a changing jobs market. Much has already been done, as the jobless figures show, but there are still too many young people unable to take the opportunities available.
	The opening of an impressive, state of-the-art campus by Josiah Mason College early next year will put the opportunities to learn new skills and top up educational attainment literally at the end of the street for those thousands of young people leaving school at 16 or just under and going nowhere. This inability—unwillingness, perhaps—to travel out of the area to access further education and other training facilities has been a big factor in the low take-up.
	A few years ago, Castle Vale School was sending out raiding parties to lasso people in so that they could get their money. It now has a waiting list extending right up to leafy Sutton Coldfield. The head teacher, Clive Owen, building on the dramatic success of his predecessor, has started a range of vocational courses which he reports students have taken up with commitment and enthusiasm. Working closely with Josiah Mason College, these offer direct roads into jobs in healthcare, leisure and hospitality as well as the building industry and vehicle maintenance. The school wants to develop a construction facility with a firm of private builders not just for young people but for older people as well, because more than 50 per cent of the adults on that Castle Vale estate have never had a paid job.
	The key to jobs now, as the noble Lord, Lord Dahrendorf, said, is skills and the need to acquire, update and change them during a working life. The parents of those 16 year-olds without this passport to a better life in a strong community took up the chance to change over the past 12 years and succeeded magnificently. The challenge now for their children, the young people of the Vale, is whether their generation will now do the same. When they understand the chances and see the prospects for more fulfilling lives, I and their parents are confident that they will.

The Earl of Listowel: My Lords, I thank the noble Baroness, Lady Morgan of Drefelin, for this opportunity of this important debate. Perhaps I might say to my noble friend Lord Dahrendorf how grateful I was to him for emphasising the progress that has been made in recent years. When one sees that so much needs to be done, one sometimes forgets how much has been achieved. I especially welcome his acknowledgement of that.
	I shall concentrate on the need to increase stability for children in the care of the state if those children are going to go on to engage in employment and education and to find accommodation for themselves. I shall urge the Government to consider significant further investment in foster care, if the stability, which we all recognise is fundamental to this achievement, is to be gained for children in the care of the state.
	I pay tribute to the noble Baroness, Lady Andrews, for her commitment and the work that she has done in this area in the past, and to all her colleagues for the action that they have taken to improve chances for children in care. I think of the Quality Protects programme, with its significant additional investment, which has now been succeeded by the Choice Protects programme. I think of the Children (Leaving Care) Act 2000, which produced extra support for young people leaving care, sometimes up to the age of 25. I think of the new duty on local authorities to provide an independent advocate for children in care, and several other achievements. I was pleased to hear the noble Lord, Lord Adonis, recently provide some reassurance to some of us who were concerned about the impact that the changes proposed for schools would have on the education of looked-after children in ensuring that for every new placement for a child there would also be an education placement assured—if I understand the noble Lord correctly.
	So I welcome the Government's efforts, but there is a shortage of 8,000 foster carers in England and Wales alone. Some 40 per cent of children placed in foster care are not appropriately placed, according to the chief inspector of the Commission for Social Care Inspection; 40 per cent of children are not properly matched with their carers, which can mean that they are out of their local authority or that it is simply not the right background for them, which is very significant to ensuring the success of their placement.
	Some years ago I worked as a volunteer in a hostel for 16 to 23 year-olds, and one of the residents was a Bangladeshi who had been there for five months and was coming up to the end of his term of six months. He had spent most of that time in his room; he had not learnt to tidy his room or to cook for himself; he had not been active in finding accommodation for himself or in looking for employment. From what I understood of his background, he had a very difficult family history—there had been a long conflict in his family—and he appeared to be suffering from severe depression. He was going to move on to a bed and breakfast in Tower Hamlets. His future did not seem to me to hold many prospects of integration or inclusion in society.
	The vast majority of children in care have experienced abuse in the family, severe neglect or conflict between the parents. They need a long period of stability in their lives, and yet one in seven experiences more than three moves in one year in their placements. The most severely traumatised young people will experience more placements, because they are more difficult to contain. At the recent Associate Parliamentary Group for Children and Young People in Care, a 19 year-old young woman told us how she had fought for two consecutive years to be able to carry on with her foster carer and how her younger brother was now carrying on the same struggle to continue with his foster carer. That is widely accepted as a common experience for children in foster care—that they are moved on prematurely into poorly supported accommodation. I recognise the steps that the Government have taken to improve that situation, but there is much work to be done. It is key that we must have more foster carers so that there is the capacity to carry on caring for the children past the age of 18, if necessary. After all, most children leave home at the age of 22, and most children do not have the experiences that children in care have had.
	So I ask the Minister to consider the report from the British Association for Adoption and Fostering and the Fostering Network, The Cost of Foster Care, which was published in July this year. It looks carefully at the need for allowances, fees and support for foster carers and comes to the conclusion, properly costed, that there needs to be an additional £616 million per year, in England alone, to provide for the requisite foster carers to recruit those vital people. I know that that is not the responsibility of the Minister's department, but in the spirit of joined-up government I ask her to consult her colleagues on what progress can be made in significantly increasing the funding of local authorities so that they can meet that need. The answer that we have had so far has been that this is a local authority responsibility—but we all know that local authorities already have huge responsibilities, and the number of children in care and the cost of providing for them has significantly increased in the past five years. I hope that the Government can continue to think very carefully about the additional funding that that group needs.
	Before concluding, let me say how grateful I was for what the noble Baroness, Lady Massey, said about children in contact with the law often being children in need of protection. A recent report from the Social Exclusion Unit, to which the Minister drew my attention, points out:
	"Although young people have been given 1,197 ASBOs since April 2004—in the same period to date just 16 Individual Support Orders have been issued alongside them to help them work better".
	Children need to be contained and to have boundaries, but they also need to be properly supported in foster care and elsewhere. I look forward to the Minister's response.

Baroness Falkner of Margravine: My Lords, I too thank the noble Baroness, Lady Morgan, for having given us an opportunity to debate these issues. So many noble Lords have painted on such a wide canvas. Many of your Lordships will remember that on the Liberal Benches these subjects were the preserve of Conrad, Lord Russell, whose belief in justice and in the ties of community and society were articulated with such passion and erudition that anything I might say on this subject will reflect the base of the learning curve rather than its height, which would have been his terrain.
	The causes are well worth championing. As many noble Lords have mentioned, inequality, both economic and social, has an impact on society far beyond the traditional measures of economic growth. There are volumes of economic research. I will mention only Putnam, Sennett, Layard and Wilkinson, as well as the noble Lord, Lord Giddens, who is missed today, for his expertise would have well informed this debate.
	The research shows significant consensus now that well-being, health and happiness have far more complex underlying factors than the simple levers of prosperity and material consumption would indicate. This is not to underestimate the impact of market economics as having been the driver of levels of wealth and prosperity that Adam Smith in his time might have found unimaginable; it is simply to acknowledge that the market has served us well over the past 200 years in an era of unparalleled opportunity, when many have choices to the point of confusion, technology makes our planet infinitely smaller in terms of our knowledge of it, and the inter-generational span is expanding so that our children will soon know their great-grandparents.
	Alongside the progress, however, we have also witnessed the effects of consumption and exploitation: the loss of habitat and environmental damage that will preoccupy subsequent generations as well as our own; the prevalence of disease whereby in some parts of the world children will not have known their parents, despite the availability of drugs; and, within the developed world, the situation in rich countries where so many still live in relative poverty and isolation, as we have seen in the aftermath of Hurricane Katrina, or in the public disorder in France and Britain in the past few months.
	Many noble Lords have spoken of the causes of social exclusion. I will confine my observations to three broad areas where I think the Government's policy has run counter to the spirit of their commitment to reduce exclusion. These are to do with the young, those in what I call the age of social investment; adulthood and working life, where there is a role for the enabling state; and old age, where there is a duty for the state to provide dignity with support for its citizens.
	The first period, from early years to late adolescence, where children's and young people's life chances are determined, is critical. There have been some very positive measures to improve life chances in the early years and to equip parents to provide good care. One example of this is Sure Start, where programmes seem to be providing real opportunities for early years development and learning. While this is helping the very young, however, the evidence does not seem to demonstrate much effect on school performance. We find that the relationship between poverty and poor school performance remains, with disproportionate exclusions as acute as ever.
	Within the early-years and school-years groups, when the evidence shows that more investment will reap rewards, we see precious financial resources diverted to the Child Trust Fund, which will have a limited return on today's investment at the age of 18. In fact, recent research on the take-up of the Government's contribution proves that it is not even going to achieve its objective of providing a vehicle for parents to save for their children.
	I turn to older children and education. Despite a host of reforms over the past eight years, none has so far succeeded in shaking that dreadful statistic that approximately 10 per cent of primary school children leave primary school at the age of 11 without being able to read, write or add up properly. We know full well that it is this 10 per cent who then proceed to fail through secondary school, drop out at age 14 and end up as the 10 per cent who are classified as not in education, employment or training. It is unsurprising that this group then goes on to form the bulk of the 20 per cent of our adult population who are functionally illiterate. They pay the price of a system that is failing some.
	Alongside are those young people who suffer from complex needs. Along with the increasing numbers of young people who are locked up in prison, they can suffer forms of mental illness, or require special educational needs that are unrecognised. A significant number of anti-social behaviour orders are handed down to such vulnerable young people, who can then end up in prison. As the Social Exclusion Unit's recent report points out, they need individual support orders, not anti-social behaviour orders. The failure of the system to catch mental health problems in the young has lifelong consequences, as many noble Lords have mentioned. Such provision as there is concentrates on meeting special educational needs and therapy. Anything outside the special educational needs framework is scant. There is a crying need for trained counsellors to be attached to primary schools to identify vulnerable children early and to provide support for better parenting.
	My second theme is the period of life when the state should act as an enabler; the period of adulthood when we are at our most productive. In this period we see the role of the state as critical in ensuring that the tax and benefit system is both equitable and fair. While progressive taxes help with countering the rampant inequalities of the marketplace, it is the timidity of the Government towards them and towards fairness that is so grossly unjust. I refer to that single most inegalitarian tax—the council tax. It remains disproportionately helpful to the very rich at the cost of the less well-off. Its capping renders local authorities unable to deliver essential services, pace the black hole of £2 billion projected by the LGA for the next financial year, and which continues to weaken accountability between the taxpayer and the deliverer of services. It is time that we changed the system in favour of a fairer one where people's taxes are based on their incomes—that simple concept of ability to pay. After years of procrastination on this issue we look forward to seeing the Government's response to the Lyons review, and we hope that it will get more favourable treatment than that accorded to the noble Lord, Lord Turner.
	My final point deals with that period in life when we become senior citizens, that period of old age when the state has a duty to ensure that we live our remaining years in dignity and freedom. I emphasise both words because they are interconnected; one cannot have dignity without Beveridge's freedoms—most importantly, at this age, the freedom from want, as the noble Lord, Lord Desai, mentioned. That brings me to the Government's response to the proposal for a universal state pension in the Turner report. I emphasise two groups in particular—women, who are disproportionately affected by poverty in old age, and ethnic minorities.
	From the Department for Work and Pensions research, we know that the wife has a very different tale from the husband, even where she has a private pension. She earns less throughout her life, starting and ending at 80 per cent of median earnings, and when she retires in 2005 at age 60, she can at best buy a life annuity of around £102 per week. The husband, on the other hand, starts work at 100 per cent of median earnings and continues at above earnings growth, falling back to 100 per cent of median earnings at retirement. At his point of retirement at age 65, he can buy an annuity of £370 per month. Some of us might acknowledge that women are the lesser sex, but by almost four times? I think not.
	Another pension scandal affects ethnic minorities, and we are now 10 per cent of the population with demographic trends pointing to an increasing trajectory. Yet, some 70 per cent of ethnic minority women are economically inactive. Those who are in employment have to deal with the issues of discrimination and economic disadvantage faced by the ethnic minority population as a whole, as well as their own gender disadvantage. They face, in the words of the Department for Work and Pensions report, a,
	"potential three-pronged erosion of retirement income".
	In reality, 23 per cent of Pakistani and Bangladeshi women are not accruing any basic state pension, compared to around 13 per cent of white women.
	Surely in looking ahead at the issues to do with social exclusion rather than inclusion the most fundamental measure must be that of supporting all citizens at a minimum level of independence that is commensurate with a rich society—I come from the Dahrendorf school in my approach to the role of the state. In not doing so, one stores up problems for future generations of a greater impact than we might guess at now. If the Government are serious about their commitment to social justice they need to prove it, with a more honest attitude towards caring for our older people.
	In concluding, I return to my three themes of nurturing our young, providing a fair framework to enable adults to avail of the opportunities that this age provides, and to respect our old and their contribution to our generation through giving them a proper safety net. From these Benches we are prepared to do our part to attain those goals.

Baroness Hanham: My Lords, I, too, thank the noble Baroness, Lady Morgan, for having provoked the most extraordinary debate. The subjects that we have gone through include health, older people, social inequalities, joined-up government thinking, race and ethnicity, multiculturalism, delivery of policies, mental health, definitions of social exclusion, the problems of alcohol and drinking, higher education, children and young people, every child mattering, pensions—not one of the Government's finest hours or conspicuous successes—and housing, with an important contribution about foster carers and children in care. That is a mega number of subjects for any debate in this House. It perhaps demonstrates the wideness of the whole problem of social inclusion and exclusion.
	I was interested in what was said by the noble Lord, Lord Desai, and I hope that I do not misattribute to him comments about social exclusion beginning in poverty. I looked up "poverty" in the dictionary, and it is defined as,
	"being poor, in need, or in want of necessities".
	The debate encompassed and brought all those aspects together. Whether we are talking of those who live in deprived areas in one of our cities; or of the deprivation caused by lack of home, job or opportunities, or by isolation; or of someone mentally ill sleeping rough, the result is the same. As many speakers have said, people lack some or all of the essentials that enable them to lead an independent and fulfilled life.
	The problems of poverty and the marginalisation of those affected by lack of material and personal wealth—whether through age, as was referred to by the noble Baroness, Lady Greengross; whether they are young or old, as was described by the noble Baroness, Lady Massey; whether through family circumstances or poor health, as defined by the noble Baroness, Lady Morgan, and the noble Lord, Lord Chan; whether through inadequate education or training, as mentioned by the noble Lord, Lord Dahrendorf; or whether through unemployment—are not new. Consideration of how to deal with them is not new either. Both have been with us since before the Industrial Revolution. In earlier generations, support and help was largely provided by benevolent individuals or organisations, but the multi-dimensional problems which cause people to be excluded from the benefits and opportunities that most of us are able to take for granted have required governments to take a more commanding role in their resolution.
	Although I did not recognise it in terms of social inclusion at the time, my own interest in the subject began as a local councillor—as I still am—in an inner London borough. That borough, while being widely perceived as peopled by the wealthy and self-motivated, none the less had and still has deep pockets of deprivation which we could not and did not wish to ignore. Policies to tackle the problem of poor housing and environment; to integrate—in the words of the noble Lord, Lord Bhattacharyya—several waves of immigrants; to provide homes, support, education and training to unaccompanied refugee children, initially from the Horn of Africa but ultimately from other troubled parts of the world—those services were developed and implemented for all those in need. Programmes such as the Single Regeneration Budget, now completing one of its most successful projects in the borough; City Challenge, which concentrated mainly on the fabric; neighbourhood renewal; and Sure Start for children have made an impact, as did the enlightened and at the time leading-edge decision to involve both registered social landlords and private landlords in a unified battle to resolve the crisis of housing and the homeless.
	Most of that was in advance of the Lisbon European Council of 2000. We have not really discussed that, but it was the provenance of social inclusion and exclusion, with the agreement among member states to concentrate on the area and eradicate poverty by 2010. As part of the means of meeting this goal it was agreed that common objectives and indicators would be developed and incorporated in two-yearly national action plans. As a member of the Committee of the Regions, I was asked to contribute to this work, by providing opinions on the first and second rounds of the national action plans, on the proposals to be incorporated and on their implementation. Much of the work that is now undertaken by this Government is based on national action plans that had been agreed at European level.
	The concept of the national action plans was that the member states of Europe would co-ordinate and benchmark good practice—not one which is easy to implement, and one which, it became clear, would work only if there were a limited number of objectives and a proper means of comparing the results and exchanging good practice. What was and remains plain is that none of the action plans are implementable without the involvement and agreement of local government, which has the responsibility for identifying those people who need help and for providing the services and support that they need. Local authorities are community leaders and advocates of local regeneration partnerships. They are employers, catalysts for economic activity, providers and enablers of services to local people, and experts on information and research.
	The voice of local government will remain essential in the shaping of the policies of social exclusion. Local authorities, with their knowledge of local circumstances, are uniquely placed to interpret and implement the often unwieldy measures framed at EU level, and those more specifically targeted, locally and nationally. They also have the powers and ability to join with other statutory and voluntary organisations—for example, health authorities—and local businesses to extend their own role through local strategic partnerships. In addition, the practical aspect of being able to pool budgets with other organisations under local area agreements should make these partnerships even more effective.
	It is essential, however, that any of these programmes, if they are to be effective and long lasting, must at least not be bureaucratic. They should involve people themselves in decisions on what is most useful for them. Where regeneration programmes are undertaken, the best results are obtained from allowing local residents to lead the project, develop the ideas, and implement the resulting decisions. The noble Lord, Lord Corbett, also identified one of the fundamental requirements: that there should be no scatter-shot of money and that when projects are started they should be given an opportunity to be completed or carried on.
	People do not like having things done to them; at a pinch, they like them being done for them; but, best of all, they like to do them—and that is what brings the best outcomes. I know from local initiatives in my area that that is what happens, but one has to have great anxieties about the recently announced five key challenges. This is bureaucracy, although the challenges are there. I shall list them, and noble Lords will be gripped by them. They are: establishing floor targets so departments raise minimum outcomes; progressive funding which starts with those most in need; joined-up and personalised services which put people first; rights being conditional on responsibilities; and shared institutions and activities which bring people together. Oh dear! We all know what that means and we probably all support them. But we, who have to dabble in social jargon, may just get the drift, but it does not sound very friendly or exciting.
	Despite all the efforts that have been made, social exclusion remains an extremely prevalent problem. I can put the matter no better than my honourable friend Alistair Burt in the other place, in a recent debate on the social exclusion report. He said that the tragedy of,
	"unfulfilled hopes and dreams affect everyone in society. They are a loss of talent to the nation in bored and unfulfilled lives and in the economic cost of repair to fractured lives".—[Official Report, Commons, 20/10/05; col. 324WH.]
	This has been an excellent debate. Let us hope that what the future brings in this area is flexibility of financial resources, local decisions and far less vulnerable and excluded people.

Baroness Andrews: My Lords, I am grateful to the noble Baroness for that comment. We all recognise that we must start at the beginning and Sure Start has been our way—a novel and successful way—of bringing services together in circumstances where young parents, parents in multiple deprivation and children who do not know how to play because their parents do not know how to enable them to play are most vulnerable. That is a model for so much that we are trying to do.
	I am grateful to the noble Earl, Lord Listowel, for revealing the record of the Government on foster care. We can do more. I shall write to him in greater detail, but he knows that next year we shall undertake consultation on the fostering allowances. For the moment, I shall leave it at that. We have followed through Sure Start with a range of programmes that build motivation and self-esteem and encourage success in school, prevent truancy and encourage young people to stay on. Yes, we are not getting it absolutely right. There is a great deal more to do, but we have seen significant improvement in those areas that enable children to access the curriculum for life, which is numeracy and literacy. We have done that through the education maintenance allowance. It has encouraged more people to stay on.
	I believe we are making progress. I take the point about meritocracy and it is quite right, of course, that after hundreds of years of failing to recognise the value of vocational training, we are now extremely serious about the standards that we expect. We have tackled the poverty of skills. Many people in our society have been out of work for many years and we have brought back into work 2 million more people, helped by economic stability. We have also targeted work-focused training and support, bringing back the most complex and difficult people. The New Deal for skills, for example, has helped people to progress, helping us to meet our skill demands. Noble Lords will know of the work that we are doing on incapacity benefit.
	On the poverty of age, we have a good record. There are fewer pensioners in poverty now because of the pension tax credit. Between 1996 and 2003, 1.9 million people, including 1.3 million women were lifted out of low income, but through supporting people, for example, we have also been able to direct more targeted help. Those policies expose the kind of social exclusion that is sometimes hidden, as my noble friend Lady Greengross said. The poverty of age involves complex poverty issues, which are not simply concerned with lack of income but lack of visibility in our society. As a government, we are proud of tackling some of the most visible and severe barriers of social inclusion. At one time, rough sleeping, or the use of bed and breakfast for homeless families seemed to be impossible problems.
	However, we are not complacent. Noble Lords have pointed to the number of groups that are socially excluded for various reasons. We estimate that there are still about 3.6 million socially excluded people in our society today, whether they are the constant victims of crime, living in temporary accommodation, not working, or have low literacy skills—I have some figures about the number of ethnic minority groups that access literacy skills, but I will write to the noble Lord, Lord Chan, as it is a complex picture. The problem is that many of these people are the same people. They are the groups to which we are addressing most of our attention and they are our great challenge. These groups are concentrated in areas and neighbourhoods that create further complications.
	Where do we go from here? There are things that we have to do: we have to build up our evidence base; we have to join up our services more effectively; we have to look at what is genuinely innovative and at what is working; and we need to identify the most persistent causes and the extreme consequences of exclusion. That is what the Social Exclusion Unit of the ODPM is doing, and we are grateful for the excellence and authority of its work, which many noble Lords have mentioned. Among other things, it has been looking at the ways in which we can improve lives through improving services. I was grateful to my noble friend Lady Henig for the wealth of examples she provided of services in the voluntary and statutory sectors being joined up. That illustrates that social exclusion cannot belong to, or be the responsibility of, any one department. I shall give a few recent examples of genuinely innovative joined-up services: we can all celebrate children's trusts; the National Community Safety Plan has set out plans to sustain the 35 per cent drop in crime since 1997; and our new Together We Can initiative is running across communities.
	On health, we now have the Choosing Health delivery plan. Health inequality is one of six key delivery priorities and is integrated across government. In social care, we have seen many important changes in relation to supported housing. Through the Supporting People initiative, vulnerable people have been able to live independently in ways that they could not do in the past.
	Turning from joining up services to innovation, time is too short to tell noble Lords about the range of things that are happening, but we are drilling down and addressing the root causes of inequalities.
	My noble friend Lady Howells, in her powerful speech, raised the question of why some people act out of racial hate. We cannot answer that question this afternoon; perhaps we will never be able to answer it. But she was right to prioritise the importance of education because leaving school with confidence, decent skills and qualifications is the key. She challenged me to identify a successful programme for attainment by Afro-Caribbean boys. We have tried many initiatives to raise attainment by children in disadvantaged groups. For example, the Excellence in Cities programme is focusing time and attention on behaviour and attendance problems. In individual programmes, such as Knowsley Plus One Challenge, we are using new technology to keep in touch with such children by e-mail and to get latecomers and absentees into school. Essentially, the answer lies in excellent teaching and learning for all children in our classrooms rather than in specific programmes.
	The noble Lord, Lord Chan, and my noble friend Lord Bhattacharyya asked me about employment opportunities for ethnic minority groups. There are some interesting initiatives on this. For example, I refer them to the Fair Cities programme in Birmingham, Leeds, Bradford and Brent where boards work with local employers and stakeholders on city-wide strategies to tackle ethnic minority worklessness. We are evaluating that. I think that it will take us a fair way forward in understanding what prevents people from getting work.
	In terms of health, my noble friend Lady Morgan gave us a very authoritative account and a very graphic description of inequalities progressing down the Tube line. I thought that was extraordinarily helpful, as was what she has said about cancer, which is not something we may associate with socio-economic differences.
	We have set ourselves very challenging targets for reducing inequalities, both in infant mortality and life expectancy. We will not achieve those unless we take the public health agenda seriously. That means everything in the public health agenda—from smoking through to teenage pregnancy and the alcohol reduction programme, which we are committing resources to, particularly in relation to young people.
	With the Spearhead Group we are focusing on the areas with the worse health and deprivation and bringing together all our skills and knowledge in the health offer we make. In the ODPM we are working in particular ways to bring three factors to this analysis and these policies. We are responsible for the social exclusion project and are concerned about area and place. However, we will never be able to deliver what we want to, whether it is in health or education, unless we understand the effects of area and place and the way that deprivation is mediated through those 88 communities in our country which present the most complex and stubborn combinations of poverty, ill-health, lack of work and homelessness. That is what we in ODPM are focusing on. We are doing it in a way which brings together all the local teams—for example, through the local area agreements and through national programmes, which we are feeding into the neighbourhood renewal areas—and we are working with the Treasury, the DTI and local enterprise and so on.
	Let me say something to the noble Baroness, Lady Greengross, about elderly people. I am delighted about this. It is completely fortuitous, and I can assure the House that this was not planted. She mentioned that she would like to see a Sure Start for older people. That is precisely the sort of thing that we are now working on with the Social Exclusion Unit, to bring together, in the way that we have succeeded with young people, the range of services and access points for elderly people that we think will make a major difference.
	So, across government, we seek to improve outcomes for all disadvantaged groups in deprived areas. Yes, we are using floor targets. I say to the noble Baroness, Lady Hanham, that I am sorry about the jargon. It has taken me some time to work out what floor targets are. They are a means of measuring progress because national targets in these areas of a complex and local situation do not really work. They miss the point. So you have to take something where you can measure distance travelled. That is one explanation for that. Part of that argument deals with promoting social cohesion and pro-social behaviour.
	I turn again to the point made by the noble Baroness, Lady Howells. Local government has a role to play because the comprehensive performance assessment is currently looking at how well councils are promoting social cohesion. So again we are making progress on our understanding and methodologies of working.
	I entirely take the point the noble Baroness made about strong local government. Within strong local government we have—and I know that she is supportive of this—focused on the local, neighbourhood level where poverty is at its most acute. We have done so through neighbourhood management, neighbourhood wardens and neighbourhood policies—not least in places like Hull where neighbourhood wardens work with Help the Aged to identify and support elderly people and youth wardens work to identify and support young people. We are finding new ways of reaching and dealing with some of these very stubborn problems.
	The noble Baroness, Lady Massey, asked me particularly about the report on youth justice. We are doing a great deal to improve the state of youth justice. We have announced funding for targeted youth crime prevention programmes. I shall write to the noble Baroness with more detail because there is quite a lot to say about that.
	This has been a splendid debate. There are a few things I want to say in conclusion. Part of the challenge is creating mixed communities in place of the concentrations of deprivation and monolithic estates that we have had in our country for too long.
	We must address the question of whether our targets and incentives are focused on the right people. We will do that, not least with the help of the SEU. We must ensure that we are spending government money where it is needed and most effective. We must ensure that our services are both personal and joined-up. We also need to ask whether we are helping people to solve their own problems. As the noble Baroness, Lady Hanham, said, we are not in the business of doing things to people; that does not work. I return to the notion of citizenship, because we must convince people to be engaged and responsible for their own improvement—whether they are parents supporting their children, adult learners or responsible for their own health, in relation to smoking, or whatever in their skills development. We will succeed only if we can convince people that they are right to be confident about what they can achieve and that the Government are behind them in achieving that.

Lord Turnberg: rose to ask Her Majesty's Government what steps are being taken to reverse the decline in numbers of clinical academic staff.
	My Lords, I am delighted to have the opportunity of introducing this debate on a cold Thursday afternoon, but never has there been a more important moment for us to discuss investment in medical research. I should declare my interests as a former professor of medicine and a Fellow of the Academy of Medical Sciences.
	Enormous opportunities are now opening up for us and we are poised to enter a golden age of medicine. Every day we read of advances in research which offer the potential to prevent heart attacks, cure cancer and the like, and undoubtedly we are living longer and healthier lives. A child born today will live two years longer than one born 10 years ago. We gain two years in every 10, and it is reckoned that around 50 per cent of that gain in longevity is due to advances made in medical science.
	But all the marvellous new insights in molecular biology, immunology, biochemistry and new technologies become of practical value only when they can be applied to the care of patients. Let me give an example of what I mean. Many years ago a substance was discovered in the body called tumour necrosis factor, TNF. It was found to have wide and important effects in biology, especially in the immune system. Enormous amounts of research were done on how it works and what it does, but it was only when TNF was applied to treating human disease that it was found to be of great clinical value. Workers at the Kennedy Institute in London did all the clinical research that was necessary and showed that antibodies to TNF could be used safely in patients with rheumatoid arthritis. This has revolutionised the treatment of the disease. For carrying out that work, Professors Maini and Feldman won the Lasker prize.
	The point I am making is that it is only the application of basic science to patient care at the end of the line, where the clinical research has to be done and where paradoxically we are currently lacking the key figures to pursue the sort of research which Maini and Feldman did so successfully. At a time when basic science is marching ahead, clinical research is faltering. At a time when we have probably the best clinical laboratory in the world in our single, comprehensive healthcare system, with its common goals and infrastructure, we are failing to take advantage of it. And while there are many reasons for this state of affairs, it is the fall in the number of those who engage in clinical research, the academic clinicians, which has been so damaging.
	Let me give some rather disturbing data which have been collected by the Council of Heads of Medical Schools over the past few years. At a time when we have seen the creation of four new medical schools and an increase of up to 50 per cent in medical student numbers—a time when one might expect the number of medical academic teachers to increase at least a little—we have seen a considerable fall instead. Between 2000 and 2004, there was a fall of 42 per cent in clinical lecturers and of 11 per cent in senior lecturers. In some disciplines the falls have been extreme. In pathology, where there were 64 lecturers in 2000, there were a mere 12 by 2004. Psychiatry experienced a fall from 114 to 40; public health from 62 to 22 and surgery halved from 98 to 50. Although the number of professors has risen a little, there remains an overall drop of 12 per cent. Similar patterns can be seen in academic dentistry, and there are also difficulties in academic nursing. There is clearly a gross mismatch between the needs of young students to be taught and the number of clinical academics available to do so, to say nothing of the falling prospects for clinical research.
	The reasons for these falls are multiple and well recognised. They include such pressures as the prolonged time it takes to train a clinical academic in both clinical practice and in research; their poorer financial rewards, research and teaching being squeezed out by the care of patients which always comes first; and the heavy regulatory burdens on researchers. Is it much wonder that many are turned off and take the easier option of going into primary care or consultant practice rather than take on this uphill struggle for smaller rewards?
	It is against this background that a number of recent initiatives by the Department of Health have been extremely welcome and should go some way to addressing the balance. First, the clinician scientist fellowship scheme set up four or five years ago has seen the appointment of a small number—so far about 80 out of 250 proposed—of elite, young clinical academics with protected time to undertake research. Secondly, the creation of the UK Clinical Research Collaboration, the CRC, is a very important initiative, with funding promised to allow a number of developments. But perhaps the major initiative has come through a CRC sub-committee, headed by Mark Walport of the Wellcome Trust, which has come out with some excellent proposals, the majority of which, I am happy to say, have been taken up by the Department of Health.
	The intention is to appoint 250 academic clinical fellows and 100 clinical lectureships each year, and that once up and running for three or four years these programmes will support as many as 750 fellows and 400 clinical lecturers. Funding for these is, of course, key, and this is promised for 25 per cent of the salaries of the fellows and 100 per cent of the lecturers. It is a remarkable and very welcome indication of the Government's commitment to medical research.
	On top of all this, the Higher Education Funding Council for England has committed to fund 50 per cent of 200 new-blood senior lectureship posts over 10 years and apparently has agreed to provide £50 million in partnership with the NHS.
	Finally, the NHS R&D Directorate has recently released a consultation document, entitled Best research for best health, outlining a new NHS research strategy which bodes well.
	You might ask, therefore, "What is the problem when all this frenetic activity is going on which seems to be the answer to every academic maiden's prayer? Why look this set of gift horses in the mouth?" Well, it is always wise to check whether the gift horse has teeth in the right place, and it is here that I would like to seek reassurances from the Minister about a number of aspects.
	The new money for research registrars is said to cover 25 per cent of the costs of their salaries so that the lucky ones can spend a quarter of their time in research. But is the 25 per cent really new money? Will the postgraduate deans, who are responsible for at least the clinical training of these doctors, be able to take on board this influx with dual training requirements, both research and clinical? Will the new clinical lectureships be taken on by the universities, which, after all, are responsible for academic appointments? There is not much mention in the consultation document of university or medical school involvement in the appointment of these posts. The major issue is whether the new money proposed for these welcome initiatives continue to be forthcoming over the next few years as promised? I hope it will, but it would be nice to have it confirmed by my noble friend.
	Of course all these developments are extremely welcome and for the first time in many years there is a sense of optimism that medical research will be given the attention it deserves. But, even though it may seem churlish of me, I have to say that to make a career in academic medicine an attractive option for all these new lecturers we are hoping to see come in, we will have to correct some of the disincentives I hinted at earlier.
	The first is the heavy regulatory burden facing clinical researchers. Much has been done following the review of research ethic committees, which the Minister initiated and have done so well, but there are many other regulatory bodies which need similar attention. There are now so many different types that it is the multiplicity of regulatory bodies which poses the burden. I hear from researchers that delays of six months are the norm, and 12 months not uncommon, because of the need to jump so many regulatory hurdles. Many active research groups have to employ staff specifically even to understand the regulations, let alone respond to them. I hope the Minister will bring his renowned skills at bureaucracy-busting to bear on these bodies too.
	Then there is the issue of the very large number of women coming through medical schools. Sixty per cent or more of new medical graduates are now women and we are ill prepared to meet the needs of this tidal wave, a veritable tsunami, of women coming through the ranks of medicine. I know the noble Baroness, Lady Finlay, will expand on this issue and I look forward to hearing more from her.
	We are at an extremely exciting time, when the returns from investing in clinical medicine are considerable, and not only in health. Calculations made in the United States demonstrated that for every dollar put into medical research, they got a return of $5 to the overall economy. There is a fivefold economic return on investment in medical research. I expect that we could get similar rates of return here, quite apart from the advantages gained from research on better health.
	We must be clear that, for the NHS, research is not an add-on, an optional extra, but an integral part of what the health service should be all about. We must take full advantage of the initiatives now taken by the department. They provide a golden opportunity, but only if they are delivered as proposed and continue to be delivered over the next few years.

Baroness Cumberlege: My Lords, I thank the noble Lord, Lord Turnberg, for initiating the debate. Given his remarkable, distinguished contribution to education, medicine, science and public health, I could spend seven minutes talking about the noble Lord, but that is not the purpose today. However, there could be nobody better fitted to introduce this debate.
	I declare an interest: I chair St George's University of London, a medical school in south-west London, established 250 years ago, and I am on the board of the Brighton and Sussex Medical School, which was established just three years ago. I mention that because I have been struck by how similar the problems are in both medical schools, which are both very successful. They are so different in their character and geography yet they have the same difficulties in academic medicine. As the Government are well aware, in some specialties clinical academics are as rare as hen's teeth and much needs to be done.
	The noble Lord, Lord Turnberg, has mentioned already the UK Clinical Research Collaboration and the sub-committee of Modernising Medical Careers. Like others, I rejoice that much is being done; quite embarrassingly, I have to congratulate the Government on that. I look forward to the Minister's reply, as I am sure that he will tell us more about that, and particularly to hearing what the long-term commitment is to funding the Walport recommendations. The long term is essential to remedy some of the mess that we are in.
	Given the shortage of doctors, I am sure that the Minister will welcome the fact that, for next year, St George's medical school has attracted 11 applicants for every student place and Brighton and Sussex 20 students for every place. Yet neither institution can attract a professor of surgery. It has not been for want of trying; there just have not been any credible applicants for those posts.
	Surgery is not the only specialty in trouble, as the noble Lord, Lord Turnberg, has mentioned. Nationally, we know through the Council of Heads of Medical Schools, last year alone, anaesthetics lost 15 per cent of clinical academics, pathology has lost 40 per cent, radiology 30 per cent, occupational medicine 60 per cent and both paediatrics, and gynaecology and obstetrics have lost 11 per cent.
	My first question is: who will teach those bright, aspiring young doctors, when there is such a shortage of clinical academics? With 208 vacant senior posts, 91 of which are professorial chairs, there is a lot to make up. Secondly, with so much of the curriculum delivered in general practice and a decline in clinical lecturers since 2003, how does the Minister propose to remedy the situation in the short term, as it will take quite a while for the initiatives to produce results, and will he address the discrepancy between consultant clinical academics' pay and that of senior academic general practitioners? Thirdly, the introduction of multiple providers further complicates the position. What measures will the Government put in place to ensure that there are sufficient training places for students in those environments?
	I shall now deal with the NHS. Recently, I received a letter from Sir Iain Chalmers, who, as noble Lords will know, is a founder of the Cochrane Collaboration and editor of the James Lind Library. He wrote to me in my capacity as chair of the working group for the Royal College of Physicians on its report on medical professionalism, which we will release next week.
	Sir Ian writes:
	"Over the past 30 years, there has been collective uncertainty about whether patients admitted to hospital with acute traumatic brain injury should be prescribed systematic steroids. This uncertainty has been reflected in dramatic variations in practice—some doctors have given steroids, guessing that they were useful; others have withheld steroids, guessing that their risks were likely to outweigh any benefits. It was not until very recently that this collective uncertainty was addressed by doctors around the world who agreed that acquiescence in this ignorance was incompatible with responsible professional practice. Thanks to these doctors, we now know that this treatment has been killing patients for 30 years. This is just one example of many that I could cite".
	As a lay person, I find that chilling. If ever there was a case made for clinical academics, surely it is that one. We need them not just for patient safety but for more than that—for more than being the translators of science into medicine. We need them as leaders and teachers, and we need them now. Yet the NHS appears to have a disincentive to employ these people.
	There is no financial incentive for a thrusting foundation hospital or a trust on the margins of fiscal viability to employ a consultant academic. They are a complication; they have two employers—the trust and the university; they are expected to deliver high quality teaching, carry out internationally respected research and do their clinical work. Some would say that that workload, executed to a high standard, is the equivalent of three full-time jobs, and without protected time, it is undo-able. Yet we know that this combination is extremely powerful in improving the care of patients and making the UK a world leader in academic medicine and the education of doctors.
	Of course, SHAs and foundation trusts are expected to make allowances and support all these activities but when pressurised to fulfil targets and achieve more stars, it is the service that always wins the day. With the full implementation of payment by results, there is likely to be an even greater reluctance not only to decrease the number of patients seen and treated but to increase costs through employing staff with research sessions. I do not think that job plans are the answer.
	It is disappointing that the Healthcare Commission did not include education and research within its core standards. High quality research should be recognised as essential in the delivery of high quality care. My fourth question to the Minister is: will the Government ensure that the Healthcare Commission explicitly recognises research and education as a trust's responsibility in its performance assessment? Lastly, what guidance will he give to PCTs in their commissioning role?

Lord Parekh: My Lords, I, too, thank my noble friend Lord Turnberg for initiating this very timely and important debate with characteristic understanding and passion.
	The decline in the numbers of clinical academic staff is striking and also worrying. As my noble friend pointed out, since 2000 there has been a 12 per cent drop in the number of clinical academics, amounting to as high as 42 per cent among the clinical lecturers. This drop is particularly high in certain disciplines— 28 per cent in the case of psychiatry, 50 per cent in pathology, 13 per cent in surgery and 9 per cent in medicine. It is also worrying with regard to dental schools. In 2004, we had 30 fewer dental academics than in 2003. I am also a little worried that 50 per cent of clinical academics today are over the age of 45, and the number of young medical graduates going into academic medicine is not rising proportionately.
	In the light of all this, there is a reason to worry. But I am delighted that the Government are fully aware of the situation and have taken a number of major initiatives. The Chancellor has given high priority to medical research. There is increased funding for NHS research and development, going up to £100 million by 2008. There is also a proposal to encourage research collaboration with other agencies and I am particularly pleased that the Government intend to establish 250 academic clinical fellowships and 100 clinical lectureships per year. The Department of Health consultation document, Best Research for Best Health is also full of interesting ideas.
	All these initiatives amount to one of the most progressive steps forward in the past two decades and I want to salute the commitment and conviction of the Government. However, no government alone can tackle a problem of this magnitude. Other institutions also have an important role to play, such as the universities, the General Medical Council, NHS staff and Wellcome and other generous foundations. In the next five or so minutes I want to briefly suggest a few ideas for non-governmental agencies and also a couple for what the Government could do in this area.
	First, the NHS culture must change profoundly and clinical research must be seen as an integral part of it. That has two important implications. Consultants and others should see their roles not only as providers of clinical services. They should also be willing to undertake and participate in academic research. It also implies that clinical researchers are seen and accepted as an equal part of the NHS staff as much as the doctors and healthcare professionals.
	Secondly, it is important that the training of doctors and dentists in our medical and dental schools should involve research as an integral part. Students should be exposed to clinical academic research and imbibe the spirit of intellectual excitement and acquire basic methodological training. They should see themselves not simply as people who are going to acquire certain skills which they will then apply, but also as reflective and creative minds who will not only be applying their skills but accumulating knowledge and contributing to the growth of medical science.
	To digress for one moment, this can also happen to some very talented students. In my own case, two of my sons went to Oxford to read medicine and I had hoped that they would become doctors. Tremendously excited by the sheer prospect of creating something new, both of them became very distinguished scientists and one of them is now a professor of cardiovascular physiology at the University of Oxford. I say that not so much to talk about myself, although that is what I have inadvertently done, but to make the point that the excitement of research is something that can be implanted and cultivated in students. Unless we do that, we will not have a large number of new graduates wanting to do medical research.
	Thirdly, it is extremely important that there should be greater co-operation between basic biological research and clinical work. Although pure research is important, medical science has increasingly moved in a direction where clinical collaboration with fundamental medical research is extremely important. After all, it was the collaboration between Frederick Banting and Charles Best which allowed them to discover insulin.
	Fourthly, it is worrying that the representation of women and ethnic minorities among clinical academics is so small. Women represent only 12 per cent of clinical academics and ethnic minorities barely 2 per cent. Steps need to be taken to increase their representation either by addressing the factors that deter them from moving into this area, or by earmarking a percentage of fellowships and lectureships that the Government contemplate for women and ethnic minorities, or at least by making flexible and part-time working arrangements.
	Fifthly, the research assessment exercise has acted as a disincentive—I can say that from my own experience as a professor, but also by looking at what has happened in the field of clinical medicine. Clinical research takes a long time to result in academic publications. The productivity of clinical academics therefore tends to be rather low, and their departments get low RAE ratings. That inevitably puts pressure on universities to reduce investments in certain disciplines, as we have seen in the case of so-called craft disciplines such as surgery, cardiology, radiology, obstetrics and gynaecology and, of course, anaesthesia. It is very important that promotions are not delayed, and that also tends to happen if the RAE rating of an individual is not up to scratch, not because of his fault but because the publications take a long time to write.
	Sixthly, unlike medical staff, clinical academics lack a clear route of entry and a transparent career structure. There are disparities in pay and working conditions. As the BMA cohort report of 1995 clearly shows, some very talented medical graduates refuse to go into an academic discipline because they feel profoundly devalued, or because they are in danger of earning less pay or because they find few higher academic posts to which they can aspire. Equally important, they are afraid that by going into an academic discipline, they are in danger of being deskilled and might not be able to return to mainstream hospital or general practice medicine, if they fail as academics.
	Finally, I shall emphasise a neglected point. Clinical academics need to develop greater international contacts and undertake co-operative international research. That should involve not only our European partners but also the Commonwealth. We have unique advantages in this country, as nearly one-third of our doctors come from Asia and Africa and have close links with hospitals and research institutions in those countries. We shall also be able to understand better our own ethnic minority population's medical problems if we keep in touch with researchers in other countries. Therefore, I very much hope that clinical research in our country does not remain merely confined to the NHS trusts, universities and so on, but becomes more entrepreneurial and reaches out to other countries.

Baroness Finlay of Llandaff: My Lords, I, too, am most grateful to the noble Lord, Lord Turnberg, for having secured this important debate. Indeed, there is an urgent need to ensure that medical academics are recruited and retained, for three cogent reasons, which other noble Lords have already covered but which I believe bear reiterating.
	First, Britain has punched above its weight in research for many years, and that research benefits patients directly. It also brings in investment to the country through pharmaceutical companies, devices and equipment manufacturers and through patents, which earn money for the university in which a discovery was made, thereby ploughing profit back directly into the academic sector.
	Secondly, the next generation of doctors needs to be taught and to learn the critical appraisal skills and the integrative thinking that is best taught by the intellectually and research-active clinical community, for there is cross-fertilisation between good researchers and good teachers in that community. Yet the teaching of students is threatened by the increasing move to private sector clinical providers, who do not have an obligation to ensure that students are exposed to clinical problems. The commissioning does not seem to impose an obligation on such providers to support teaching and research, so even with the service increment for teaching money—the so-called SIFT—we will not be able adequately to recruit teachers from the service to meet the needs of the increasing numbers of healthcare students.
	Thirdly, there is the issue of patient care itself. Just as common things occur commonly, rare things occur rarely; yet for the patient with the unusual presentation or the complex rare problem, it is the intellectual rigour of the academic centre that has always been brought to bear to establish an accurate diagnosis and then plan an appropriate treatment. So it is the practice of clinical academics that directly benefits patients, particularly those with rare disorders—the so-called orphan diseases. There is evidence that patients appreciate that a teaching environment directly benefits them and others because the standard of clinical care is driven up by the teaching environment.
	In my own department, we have recently published our findings that patients are not harmed by students learning oncology from them. Far from it, patients reported a wide range of benefits from having a student allocated to them—including appreciating someone else that they could talk to about their illness, who could give them information as well. So with the proven benefits that accrue, it seems odd—as the noble Baroness, Lady Cumberledge, has already highlighted—that the Healthcare Commission did not include teaching and research as part of the core standards.
	The number of clinical academics has fallen by 12 per cent since 2000, despite medical student numbers increasing. Although the consultant posts have increased in the UK by 24 per cent since 2000, 90 per cent of the research in the NHS is undertaken by clinical academics. Among those in academic posts, the number of women has not risen, as noble Lords have said, despite the huge in numbers of women in medicine. There is only one woman dean of a medical school. Only 20 per cent of medical academic post-holders are women, with the proportion tapering with seniority. Only 12 per cent of the clinical professorships are held by women. At lecturer grade, a third overall are women, but several women at senior lecturer grade and above report being discouraged from pursuing an academic career, feeling that there is a glass ceiling, even if the concrete roof is beginning to crumble. Yet these very bright research juniors do not have role models for how to have a baby and be a professor, and do both successfully.
	Now, however, an even greater threat to academic medical posts is emerging. The NHS funds 39 per cent of all such posts—as it should, as it is the NHS that benefits from their clinical role. For example, society takes it for granted out there that Professor Roger Williams was the person who oversaw the clinical care of George Best, as well as undertaking the liver unit research for which King's is famed as a department. Such clinicians in academic posts have honorary consultant contracts with the NHS with fixed clinical sessional commitments, and they often work way beyond their contractual obligations. Since the Follett report they are appraised by both the NHS and the university, they are answerable to the NHS for their clinical activity, and they are effectively jointly employed. For salary purposes their pay is processed through the university, and it needs to be, for the research assessment exercise returns to reflect accurately the work done by the academic members in the university.
	However, this longstanding tradition of joint NHS and academic posts is seriously under threat from the revenue collectors, otherwise known as the VAT man. The Minister will be aware that a tribunal in Glasgow recently ruled that VAT should be levied at the standard rate on the salaries of NHS-funded clinical academics at the University of Glasgow. This verdict has serious implications if it is not revisited. Sir Nigel Crisp has recognised the size of the problem, and in October this year he informed the Council of Heads of Medical Schools, on which I sit as an observer, that if this became more general,
	"Treasury would be likely to expect DH to bear the additional costs. This would make it harder than at present to recruit clinical academics".
	The additional cost to "DH" from this VAT bill is likely to be around £60 million per annum. This will completely undermine the Walport money that has been put aside to stimulate the career progression of the rising stars in clinical academia. We certainly need to bring these bright medics on, otherwise their potential will be unrealised or they will emigrate. What steps are being taken to address this? It could clearly negate any good done through implementation of the Walport report.
	The universities and NHS trusts believe that the issue should be addressed nationally, and that there is a way forward. There needs to be an agreement that the salaries of such staff fall outside the scope of VAT by virtue of the tightly integrated nature of a clinical academic's work. I have already explained that teaching, research and service delivery are entirely interdependent, and that the joint job-planning and appraisal that now takes place as a result of the new consultant contract—and of Follett implementation—essentially means that these NHS-funded clinical academics hold a joint employment contract. However, there is a great deal of uncertainty and disquiet in the sector at present, arising from the local initiatives of Glasgow's HM revenue collection officers.
	I do not expect the Minister to be able to reassure me today—that would be too much to ask on an issue as complex as this—but, given the circularity of the financial flows, all out of public money, I hope the Minister will seek to provide clarity and ensure that the posts are deemed to be outside the scope of VAT, to avoid academic posts being destroyed.

Baroness Warwick of Undercliffe: My Lords, I join other noble Lords in congratulating my noble friend Lord Turnberg, on proposing this important debate. He has drawn the attention of the House to an issue that is becoming increasingly pressing. I declare an interest as chief executive of Universities UK. Universities are of course responsible for the education of our clinical academics as well as our medical students.
	Since 2000—and I am repeating a statistic that will probably be a death knell for the Minister—there has been a 12 per cent decrease in the number of clinical academic staff. During that period, the number of medical students has increased by 40 per cent and four new medical schools have opened. The expansion is set to continue. Medical schools are currently bidding for an additional 100 student places in England, and we expect further increases to follow. In the past two years alone there has been a 17 per cent drop in the number of clinical lecturers. In dentistry, clinical academic numbers reached a 10-year low in 2003 and have since declined still further from 473 in 2003 to 444 in 2004. That is at a time when the Government are seeking increases in dental student places too.
	That has an impact not only on teaching but on research, in which the UK is recognised as second only to the United States. The research conducted by clinical academics is highly marketable and it supports patient care in the NHS. Some 90 per cent of NHS research is conducted by clinical academics. A reduction in the research capacity of the UK in this field would compromise our ability to innovate and lead the way in all areas of healthcare.
	Take, for example, one of subjects referred to by my noble friend Lord Turnberg—pathology. An understanding of the basic underlying cause, nature and origin of disease is critical to all medical practice and is at the forefront of medical research. A shortage of academic pathologists at all levels will compromise medical training as well as the UK's research capacity. There are now only 12 clinical lecturers in the whole country, and they are concentrated in just six schools. Four years ago, there were 64 clinical lecturers, which means that 80 per cent of the medical schools in the UK are without clinical lecturers in pathology.
	The reasons for the shortages are mixed, depending on the specialism. Various factors—such as the length of time needed to train; short-term and temporary appointments with limited career prospects; more attractive career opportunities and pay in other sectors—all play a part in leading talented individuals to conclude that the demands on clinical academics are excessive and that the pressure to maintain clinical activity, research and teaching all in one role is simply not possible.
	Governments have been aware of this problem for at least 10 years. Successive reports have highlighted the staffing problems in teaching and research. Most recently, the Department of Health and the Department for Education and Skills Strategic Learning and Research Advisory Group commissioned work on the development of the workforce. The resulting report, Developing and Sustaining a World Class Workforce of Educators and Researchers in Health and Social Care, identifies some possible solutions. The report makes recommendations for government, for higher education institutions and for the health service, particularly about career planning and development, to ensure that we have the workforce that we need for teaching and research in both sectors. While partial funding has been made available for a limited number of lectureships and fellowships in medicine only, the effects will none the less take some time to feed through into the wider health and education sectors, and the nature of the funding mechanism proposed is not stable. So I hope that the Minister will be able to say something about stability and sustainability of funding.
	However, it is important that we should not only be concerned about the strength of the teaching workforce for doctors and dentists. In nursing and the allied health professions there is a need for a much more far-sighted workforce-planning role to support students in practice and to address the expected increase in retirements from those professions over the coming years. The Government should consider how they can make the best use of all healthcare professionals, as new types of practitioner emerge in the health service and the mix of skills required continues to change.
	If the UK is to reduce its dependence on qualified medical professionals from overseas, particularly those from nations that can least afford to lose such personnel, we must take steps to ensure that we can be self-sufficient. Expanding the number of medical schools and increasing the number of available places is part of that, but without suitable staff to teach the students and placements for clinical practice, we are unlikely to make the advances that the public have every right to expect.
	There are many powerful reasons why the Government should take action—to enable us to deliver expansion, for the sake of the international development agenda, and because high-quality teaching and research are essential to the provision of high-quality healthcare. I therefore hope that the Minister will recognise the importance of collaboration between the higher education and health sectors, and of providing greater support and encouragement for that collaboration. I also hope that he recognises that the underpinning education and research that sustains health professionals needs stable funding, a longer-term perspective, and careful planning.

Lord Rea: My Lords, my noble friend Lord Turnberg has been so successful in recruiting speakers to this short debate that we have very limited time. As he recruited me only yesterday, my contribution will be more a series of snapshots than a deep analysis.
	I agree with my noble friend that the Government have taken important steps, which he outlined, to reduce the shortfall. As well as that, they have promised an additional £100 million per annum by 2008 for NHS R&D. It would be interesting if the Minister were able to tell us how that funding will be allocated in relation to the problems outlined in the debate. However, most clinical academics will reserve judgment on those rather grand-sounding initiatives until results begin to come through. There is a long way to go.
	It is surely unacceptable that clinical academic staffing levels nationally have been allowed to dwindle at the same time as student numbers have greatly increased. It is of course much easier and more politically visible to increase student numbers than create and fill new clinical academic posts. However, without that parallel increase, the end product will inevitably be of lower quality. As other noble Lords have said, it is the quality and quantity of research that is suffering most, as the clinical academic service demands on clinical academic staff are more pressing and urgent, especially when time and staff numbers are short. My information from the coal face comes from my son, who is a senior lecturer in oncology at Birmingham University and is involved in multi-centre chemotherapy drug tests. His unit is up to full strength, but other parts of the medical school are less lucky. Posts have not been filled as they have become vacant, with the results that I described.
	Many clinical students have to travel some distance to peripheral hospitals to find sufficient numbers of patients with whom to gain all-round clinical experience. That practice is not new and has much to commend it; I felt that I gained a lot by those attachments to non-teaching hospitals. Teaching hospitals have a higher proportion of less common conditions, and students there have less hands-on experience. Although the National Health Service staff at peripheral hospitals who teaching clinical students are good doctors and teachers, they mostly do not have protected time for teaching or research. In particular, they are often much too busy to attend academic seminars and other events at the university aimed at keeping teaching clinicians at the forefront of clinical knowledge. Those out-of-town clinicians are in fact keeping our medical schools going, especially now that student numbers have risen so much. They deserve better recognition, better academic status and facilities and, above all, dedicated paid teaching sessions. Although peripheral GP practices are perhaps treated better, many of the same factors apply there, too.
	Another area pertinent to the debate is the joint funding of clinical trials and other research by the pharmaceutical industry and universities. The industry has to find not just 100 per cent of the universities' overheads, but now 110 per cent. In their present financial straits, universities naturally see this as a way of augmenting their income. After all, the company may make a large profit through application of the research. That actually means that less research is coming to the UK, despite its excellent reputation and research skills. Countries in Europe, especially the new members of the EU, are much cheaper and are rapidly increasing their skills. The Government should make it easier for the international pharmaceutical industry to continue to carry out research here.
	It is vital that the Government's good intentions be translated speedily into action; otherwise, the danger is that this country's fine record in clinical research and teaching will be relegated to Division 2, instead of vying for the top place of Division 1.

Baroness Murphy: I, too, thank the noble Lord, Lord Turnberg, for the debate. I shall speak for a short time on the impact of the decline of clinical academic medicine on the NHS. It is a topic about which I have been hopping mad for at least a decade, so I am delighted to have the opportunity to be hopping mad in public.
	For 15 years, I held a clinical chair in one of the so-called Cinderella specialities, geriatric psychiatry. Indeed, I hold a visiting chair at Barts and The London, Queen Mary's School of Medicine and Dentistry, to which I contribute an hour every year. Until very recently, I sat on the councils of Queen Mary, University of London, and of City University, which has a thriving and successful academic nursing department and other academic departments relating to professions allied to medicine. Now, as chairman of the strategic health authority, I have been an active go-between between the NHS and our higher education institutions and chair the joint strategic partnership board, and I am all too aware of the tensions between a medical school's priorities of research and teaching and the NHS drive for improved service delivery.
	I have witnessed with increasing dismay this past 10 years the impact of education and science policy on the development of local health services. The collateral damage from the RAE—the "Exocet" that has winged its way into the health service—and the focus on molecules and bioscience away from the applied science of delivering care has had the following serious and negative impact. We have heard about the reduction in the number of academics, but I shall just talk about the departments. Academic radiology is now down from 12 departments in 1997 to three departments now. It is almost dead. Academic anaesthesia is going the same way. Some 50 per cent of academic care of the elderly medicine departments have gone, the rest are failing rapidly and the quality of surviving departments is mixed. Academic psychiatry survives by being utterly disconnected from the needs of patients with mental health problems in most places, although there are a few notable and laudable exceptions. As we have heard, a quarter of academic psychiatry posts have disappeared since 2001.
	Health services research is barely surviving, and few quality departments are available for training, even though the Department of Health, for example, in its recent review of cancer research priorities, put such research as its absolute top priority for delivering cancer research to the population. Public health and social medicine are in decline, and primary care academic departments of general practice are in a parlous state in many areas. In east London, we are the baby production capital of western Europe and are very proud to be. We deliver 25,000 babies every year, and yet we have no chair in obstetrics and no prospect of recruiting one. Only a handful of serious academic departments of obstetrics is left.
	I have no doubt that my foundation chair—the first in geriatric psychiatry in this country and, I think, in the world—which was funded by the NHS in 1983, would not now be created. King's College would no longer accept the money—the risk would be too great. The research funding that I was able to attract came largely after my appointment. These days, people have to be RAE stars already to be appointed to academic departments.
	If I talk to my NHS management colleagues about my concern, they tend to shrug and say, "So what? These professors were very costly anyway. They did not all do the work that we wanted them to do in the NHS. They concentrated on the wilder shores of research medicine". It is true, too, that globally, on this World Aids Day, there is a serious disjunction between the need to solve the world's biggest health problems and what academic medicine wants to research. That was raised not long ago in a series of articles in the British Medical Journal. After all, the NHS is largely populated by fascinating patients with rather boring, everyday diseases. The RAE has encouraged research at the biosciences cutting edge, not perhaps the incremental painstaking studies that improve stroke outcomes or better help people with long-term conditions to avoid hospital admissions. Many NHS managers do not have much sympathy with the problem of the reductions.
	The outcome of the loss of academic role models and of some of the brainiest doctors in academic medicine is that younger doctors and their professional colleagues see such dying academic specialties as second-rate. It is a self-fulfilling prophecy. The quality of the NHS services declines when a local academic department closes. That has had a real impact nationwide on the quality of maternity and psychiatric services. The care of older people in some areas is going backwards, in spite of the splendid work being done on the national service framework, which one would expect to be led by some of our brightest clinicians. In fact, we have a dearth of stars. My point is that the moment that an academic department closes locally the NHS suffers profoundly.
	Why was it that back in 1973 those at Hope Hospital in Salford were rather keen to have a bright young gastroenterologist set up a new academic department of medicine? They were keen because they knew that it would have a serious impact on the culture and quality of medicine delivered to Hope Hospital and to the people of Salford—and so it proved. We no longer have those opportunities, and the Department of Health should say why it no longer provides support to universities to get that right. Therefore, I should like to know what the Department of Health and the Department for Education and Skills are doing jointly to stop their policies working against each other to the detriment of the National Health Service.

Lord Winston: My Lords, I, too, am grateful to my noble friend Lord Turnberg for introducing this very important debate. Governments, including this one, have successively talked up how they value the National Health Service as a unique and wonderful institution, but the key to its quality is very much the medical education that has been provided in this country and particularly the accent on specialist care, because specialist care provides a model for so much teaching and research.
	Academic medicine has been threatened for a long time. The threat was critical with the development of the internal market under a previous government, and it is a great pity that we did not abandon it. The internal market has prevented teaching hospitals concentrating on a large series of patients, which is good for teaching and research, and in consequence training has been less good. I need to make it clear that I am going to be talking about teaching and training as different issues in academic medicine.
	The accent on primary care trusts as the chief funders in the health service has not always been helpful to academic medicine. A key problem of serious importance in medical education at the moment—one to which other speakers have referred—is the impact of the research assessment exercise. Most people who speak about the RAE often speak with sour grapes, having not scored highly in the RAE themselves. I point out to the Minister that I speak from an institution, a unit and a laboratory that has had the highest possible score on the RAE on each successive assessment, so I do not think that that claim can be laid in my court.
	The RAE is severely corrosive in all sorts of ways. It is widely criticised in all universities for causing the skewing of research activity; for the loss of good teaching, particularly in the new universities, which now, of course, cannot provide research activities to attract good teachers; for questionable metrics on impact; and on the issue of innovation—not an immediate cause for this debate. The worst effect undoubtedly has been in the health service and in the medical schools, which I have suffered the most.
	I point out to my noble friend that the modern clinical academic is required to do four different jobs. First, he has to demonstrate excellence in practice, which has become increasingly critical, quite properly, with better clinical governance and better records. I never thought that, at the age of 65, I would be happy to retire from the health service. I did not believe that that would be possible with the kind of contact that I have had with my patients over many years, but this year I feel that a great weight has been lifted off my shoulders. That is a problem with so many clinical academics. Many of them are seeking to retire as early as possible, something that will have a serious impact because often they are the most capable of good teaching, even if their hands shake too much to do good surgery. I note the smile of the noble Lord, Lord McColl of Dulwich, sitting on the Front Bench opposite. I bow, of course, to my colleague's great experience in surgery.
	Secondly, there is research. It is absolutely true that research has been skewed in the academic sector of medicine. Increasingly, it is almost entirely focused on non-clinically relevant areas. In my laboratory, we go for research that is likely to score highly in the research assessment exercise but is unlikely to have much impact on clinical medicine. So, for example, my team would far rather publish in Nature or Science, but almost no medic will read those journals and so the research will have little impact on clinical practice. We do not go for the clinical journals because, if we did, we would not receive the score that maintains the income needed to maintain an academic department.
	Unfortunately, very little clinical research is taking place in so many medical schools. As my noble friend Lord Turnberg said, heavy regulation is another disincentive. I want to give, as he did not, two examples of that. One is in an area in which I applied for a simple research project using embryonic stem cells—waste material. They are embryos that cannot be given to patients and which patients are freely giving for other research. That application has been held up for eight months by the research ethics committee over a trivial matter, partly because it has such a pressure of work that it cannot get through it quicker. We now have to go to the HFEA, and it will be interesting to see how long it takes us to go through that regulatory body. With my animal research, I waited 13 months for a licence to carry out one injection into the testicles of six pigs. That seems to me to be undesirable in an area in which we are trying to compete with our American colleagues across the sea.
	Thirdly, teaching is low-rated, but it is a key to excellence. It is also a key to morale and to influence throughout the health service. Finally, something as important as teaching is training. We cannot do all three of the previous exercises and train young doctors as well. It is impossible to take them through surgical procedures, for example, with the attention that is needed. My noble friend will understand that many young consultants are appointed who would have needed more training in my day, so much so that my surgically based colleagues commonly complain that they are called out by new, younger consultants who have never seen a relatively common operation before and need some assistance. That is not satisfactory for patients, and it is a real problem.
	In my last minute, I must briefly talk about obstetrics and gynaecology, the discipline in which I trained. It is craft-based, and considerable exposure is needed to acquire and maintain clinical skills. The RAE has had a disastrous effect on it. The recent editorial in Volume 112 of British Journal of Obstetrics and Gynaecology points to that; I can give the Minister the reference if he wishes to see it. It is increasingly the case in most universities that O&G is hardly a subject for RAE purposes because of the risk of there being weaker activity. The decline in the number of lectureship posts by one-third has hit O&G in my university particularly hard. The number of lectureships has been cut down to one, and that post is vacant. Typically, the post that I held before I retired, as a clinical professor with one of the busiest jobs at Hammersmith Hospital, is now vacant, and it will be filled, as is so often the case, by a non-clinician because that is nowadays the only way of maintaining the research assessment exercise. We need research in pregnancy, and, if we do not have it, there will be a massive problem.
	Finally, I draw the Minister's attention to my concern about R&D funding in the health service. Spending 1 per cent of the total output of the health service on R&D is insufficient, particularly when there is a good case for suggesting that a great deal of the current R&D function does not go towards research but towards propping up the health service in many teaching hospitals.

Lord Smith of Clifton: My Lords, I am also grateful to the noble Lord, Lord Turnberg, for initiating this timely debate. It is interesting that during the debate, optimism has been expressed in the future tense, but gloom and foreboding have been expressed in the past and present tenses. As the noble Lord, Lord Rea, said, we will see how successful the innovations that the Government have outlined are in the event.
	The medical employment field is full of problems at the moment. Recruitment, deployment and retention, in particular, raise a series of concerns to which many noble Lords referred. They have also mentioned the four new medical schools that have been created to increase the number of doctors. That is all very well, but it is endangered by the concurrent changes in the career pathway for hospital doctors, who will be the consultants of the future, and has caused a shortage of junior training grades. Many recent medical graduates are finding great difficulty in getting a foot on the ladder. It may be a glitch at the moment, but it will have adverse consequences for the future.
	The medical curriculum has undergone radical changes. The age-old concept of pre-clinical training has been all but exorcised. I am advised that there are coherent reasons for that, and that it is important that medical students should be introduced to patients from the outset of their studies. There may be a cogent case for this very radical departure, but I cannot avoid the suspicion that it conveniently disguises the fact that in recent decades, as many noble Lords have pointed out, it has proved to be extremely difficult to fill posts in the established pre-clinical subjects: physiology, anatomy and biochemistry. That was largely due to the fact that academic salaries lag considerably behind those of hospital doctors. As a consequence, pre-clinical teaching is very patchy in quality and I worry how well versed future doctors will be in the basic subjects of their calling. Moreover, the problem has been compounded in clinical teaching where many chairs in clinical medicine remain unfilled, as many noble Lords have said, because of the disparity in the salaries and workloads of academics and consultants. Neither of those factors is to the advantage of British medicine.
	There are two further concerns. First, most of the pioneering research in medicine is undertaken by medical academic staff. The reduction in their numbers puts this in serious jeopardy. It is short-sighted in itself and, furthermore, impacts directly on the quality of the practice of medicine in hospitals and GP surgeries. In my view—and this was referred to by the noble Lord, Lord Parekh, and other noble Lords—not enough of the university medical sciences score 5A ratings in the research assessment exercise to guarantee that the UK stays in the forefront of medical advance.
	Secondly, this alarming picture on the research side is paralleled by the growing reliance on private contractors to provide hospital services—again a fact to which many noble Lords have referred. I accept the need for a mixed economy in such services if waiting lists and so on are to be reduced and services improved, and there are other related benefits. But there are also two very serious disbenefits. First, private hospitals recruit graduates from medical schools to which they make no financial contribution. Secondly, they invariably make no provision for training placements. Other noble Lords have referred to that. On both counts they are the beneficiaries of a system for which they pay nothing. They are classic free riders. The growth of private medical provision, which continues apace, has serious implications for the next generation of doctors.
	The situation regarding dental academics also causes concern. There have been reductions in the number of dental academic staff, as has been noted, there are a number of unfilled vacancies, and those in post are an ageing cohort. The creation of a new dental school, which the Government proposes, without adequate resources, will further exacerbate the problem. I declare an interest as a resident in the region, but I trust serious consideration will be given to attaching the new dental school to the Hull and York medical school: there is a chronic shortage of NHS dentists in the region.
	This debate has highlighted the parlous state of academic medical and dental teaching and research. There are serious medium and long-term consequences unless the situation is rectified. We must hope that the Government's new initiative will do that. In the short term, as many noble Lords have said, there are immediate problems that need to be addressed by government. I select two of the most pressing and ask the Minister for his response.
	First, following the remarks of the noble Baroness, Lady Finlay, what concordats will the Government enter into with private hospitals to allow for training placements for junior staff? Secondly, as the noble Baronesses, Lady Cumberlege and Lady Murphy, and the noble Lord, Lord Winston, have said, what guidelines will the Government issue to ensure that hospital trusts, foundation hospitals and primary care trusts make adequate provision for sustaining academic medical research and teaching? I should be grateful if the Minister in closing would address these questions.

Earl Howe: This is one of those occasions where I am left feeling somewhat redundant after so many excellent speeches in which almost everything has been said. The noble Lord, Lord Turnberg, has spoken with great authority and clarity, as he always does, and I feel that all that is left for me is to add some points of emphasis.
	The first point of emphasis is very easy. We should be in no doubt of the importance of the issue. I take a very simple view of clinical academics. They are that essential cog without which none of the constituent parts of the NHS engine can begin to function. Upon them depends not just the teaching of our future doctors but also, in a very real sense, the maintenance of those standards of clinical leadership which have always put the UK in the front rank of specialist medical excellence. And, as we have heard so eloquently expressed, upon them depends the maintenance of that vital bridge—the bridge between the expanding state of our knowledge about the basic mechanisms of disease and the development of new treatments which are of direct benefit to patients. Without clinical academics the NHS cannot advance or function. That is why the steep decline in their numbers over the past few years is a cause of deep concern.
	Perhaps my second point of emphasis ought to be a tribute to the Government. They are quite clearly taking this problem seriously. The creation of the UKCRC; the substantial new money for NHS R&D; and, most recently, the Walport report, which has led to the creation of new academic clinical fellowships and new clinical and senior lectureships, are, in anybody's language, just what the doctor ordered.
	As with so many problems in life, money alone will never be enough. Problems associated with the decline in clinical academic numbers concern much more than that. If you ask many clinical academics what oppresses them in their professional lives, they say that it is all too much. It is like doing two or more jobs simultaneously. As well as that, the constituent parts of the job have become unbalanced, with NHS priorities—the clinical pressures—squeezing out the time available for research. There is frequently an unspoken feeling that research is a bit of a bolt-on extra to the real task of doctors in hospitals, which is to treat patients. Somehow, that unspoken feeling must be banished. That is an issue for management as much as clinicians themselves.
	All the time, everyone needs to remind themselves that effective treatment of patients is about more than just using tried and tested techniques. If we are to call ourselves a world-class health service, it is also about creating sufficient capacity in the system to evaluate new tools coming our way from academia and industry. Only by careful evaluation of those interventions will they become usable. As that happens, patients get early access to novel therapies; clinicians become familiarised with their benefits; and the standards of clinical practice move ahead. We are talking about fostering and maintaining a culture—a culture of inquiry—that the UK has always had but which many people are saying has started to ebb away.
	The noble Lord, Lord Parekh, was absolutely right about what drives that culture. Young trainee doctors are enthusiasts for what they do. Many may be fired up by the idea of small-scale clinical research in which they can personally play a part. In the past, that sort of early exposure to research was what so often led to a trainee wanting to follow a research-based career. But enthusiasm is quickly dampened by the regulatory hurdles; the shortage of time spent at the bedside of patients during training; and by the difficulty of attracting grant funding, other than for large research groupings. In that context, the announcement of the new academic clinical fellowships was particularly welcome.
	However, it is not enough to make the career pathway more attractive in the abstract. We need to ensure that nothing in the system acts as a barrier to innovation in any given discipline. The recent proposal to set up a linked group of academic medical centres may well have potential, but I am worried that that may unreasonably disadvantage other centres of excellence and that there will simply not be the necessary capacity to pursue high-quality research in some key specialties. We often hear it said about the research assessment exercise—the RAE—that, for all its merits, it does little to help struggling schools improve and that, for the reasons given by the noble Lord, Lord Winston, it often may not accurately reflect the quality of the research being carried out. We hear of staff being reconfigured and research themes being re-jigged simply to notch up high RAE scores. One casualty is career stability. Another is the quality of teaching, for which there is already little enough incentive.
	Worthwhile patient-based research can be a long-term business. Somehow, we need to reverse the decline of the past few years in research relating, for example, to public health, pathology and a number of the so-called craft specialties, such as anaesthetics, obs and gynae and radiology—many of them, ironically, key priorities for the NHS. Universities do not want their hands tied on the areas of medical research on which they focus, but there is a good case for having some mechanism to ensure that there is national coverage of all relevant specialties. Will the RAE in 2008 take those issues to heart?
	The NHS is currently a cauldron of change in which service provision is the main driver. Amid all that change, teaching and research can all too easily be afterthoughts. The pattern of commissioning by PCTs, not least to independent operators, may restrict the pattern of research conducted in NHS teaching hospitals. The rise in student numbers—welcome in itself—can serve only to put yet more pressure on clinical academics and, in so doing, may dilute the quality of training and research. We need to be alert to those risks.
	The proposals put forward in the recent consultation paper, Best Research for Best Health, may not be right in every particular, although I think that they are very promising. But, alongside the Walport report, they represent a golden opportunity to turn the tide, which must be followed through if there is to be any hope of resolving the grave problems to which the noble Lord, Lord Turnberg, has drawn our attention.

Lord Warner: My Lords, I join other noble Lords in congratulating my noble friend Lord Turnberg on providing us with the opportunity to discuss this important topic. As a government concerned with ensuring that the UK has a knowledge-based economy and committed to continuing to improve our NHS, we recognise the important contribution that clinical academics make to research, teaching and patient care. This is why we are determined to secure a strong academic base to support both research and the expansion of medical and dental education. The noble Baroness, Lady Finlay, rightly identified the economic case for a strong research base. We share many of the concerns expressed by noble Lords about the decline in numbers of clinical academic staff, which is why we are acting. But, without being complacent, we are pleased that the Council of Heads of Medical Schools and Council of Deans of Dental Schools in their June survey show a slowing in the rate of clinical academic decline—a "spring shoot" in trying to move forward into the future with more success.
	My noble friend Lord Rea was right about the need for the UK to be competitive in attracting clinical research to this country. Universities need to reflect on that in what they charge pharmaceutical companies. Those are issues that we all have to reflect on. I recognise that clinical academics play a crucial role in teaching, research and patient care, but we must also remember that NHS consultants and other professionals do the bulk of practice-based teaching. Since 1997, there has been a 30 per cent increase in consultants in England with honorary contracts to do teaching and/or research in the education sector, which is up from 1,685 to 2,184 in 2003. None of that is to diminish the contribution of clinical academics, but it is important to recognise this other and growing teaching resource.
	Let me say something about how we are responding to the challenge that my noble friend Lord Turnberg and other noble Lords have set out so well. I am grateful to noble Lords for the acknowledgement that we are acting in that area. In England, we are investing nearly £33 million over 2004–05 and 2005–06 to support the extension of the new consultants' contract to clinical academics. I remind the noble Baroness, Lady Cumberlege, that another £3 million is specifically to support senior academic GPs—so we are putting money into that area. As a number of noble Lords have said, in the 2004 Budget, we announced an extra £25 million in each of the next four years to strengthen clinical research in England. I will certainly write to my noble friend Lord Rea and other noble Lords about the detail of that development.
	We are undertaking a major reform of postgraduate medical training through our Modernising Medical Careers initiative. This has proved a timely opportunity to promote academic medicine by offering trainees more academic placements and dedicated academic specialist training programmes. The first phase of Modernising Medical Careers saw the introduction in August 2005 of two-year foundation programmes, which replace the pre-registration house officer year and the first year of senior house officer training. We announced funding earlier this year for academic placements for 5 per cent of all foundation trainees, which will provide early experience that should stimulate interest in and recruitment to academic medicine.
	Modernising Medical Careers has joined the UK Clinical Research Collaborative, which a number of noble Lords have mentioned, in developing new academic training programmes for post-foundation trainees. The joint Academic Careers Sub-Committee, under the excellent chairmanship of Mark Walport, again to which a number of noble Lords have drawn attention, reported in March proposing solutions to problems in academic medicine with the goal of improving all aspects of academic careers for medically and dentally qualified researchers and teachers. I announced on its publication in March this year that the Department of Health would provide funding of £2.5 million to start as quickly as possible new programmes under Modernising Medical Careers for clinical academics. I did this so that we could make a start on implementing the Walport recommendations, conscious that inevitably we would have to do more work on mapping out the detail. But I thought it important to make a start, which I hope is reassuring to my noble friend Lady Warwick, who asked about long-term financial planning and stability.
	As a result of taking action quickly, we have been able to begin the process of enabling more academic clinicians to follow their chosen career path. On 6 October the UK CRC launched a competition for an integrated academic training programme for doctors and dentists in England and Wales. The first fellows will start in 2006, and programmes will provide up to 250 clinical fellowships and 100 clinical lectureships each year as part of the specialist training stage of an academic medical career. Once fully established, these programmes will support around 750 academic clinical fellows and 400 clinical lecturers. We are currently planning for full establishment by 2010.
	The noble Baroness, Lady Cumberlege, asked about the long-term commitment to funding. She knows the rules around governments and future commitments outside the current spending review period. My response to her is this: judge us by the action we have taken so far. We are committed to taking this programme forward energetically.
	The first phase of the integrated clinical academic training programme, Academic Clinical Fellowships, supports those in specialist training, while the second phase, Clinical Lectureships, provides opportunities for post-doctoral research career development or higher educational training and attainment of the Certificate of Completion of Training. These will help to alleviate the problems so clearly identified by a number of noble Lords.
	Additionally, the Higher Education Funding Council for England is committing up to £50 million over 10 years to support up to 200 "new blood" senior clinical lectureships, in partnership with the Department of Health. There will be five annual rounds of awards following the competition launch this month, with the first lectureships commencing in 2006.
	In addition to government departments, healthcare organisations and universities along with several major UK medical research charities have joined this important opportunity to revitalise clinical academic training. The British Heart Foundation, Cancer Research UK and the Arthritis Research Campaign will be promoting expertise in specific clinical disciplines through focused investment. The Health Foundation is making a new investment of £5 million to support up to nine talented clinical academics over five years. Applicants for its Clinician Scientist Fellowships will come from those working in identified national shortage disciplines; namely, radiology, pathology, anaesthesia, surgery, psychiatry and public health. In tackling the problem, we are seeing the kind of partnership approach that we tried to promote when we established the UK CRC in early 2004.
	We continue to work with NHS employers and the Universities and Colleges Employers Association to implement contracts of employment for clinical academics which deliver the joint planning and appraisal recommended by the Follett report, encouraging staff to enter clinical academia and gain fulfilment from all aspects of their role.
	The noble Baroness, Lady Finlay, also raised the subject in the context of VAT. I have some good news for the House on this issue. The Government have been taking action on the VAT implications of the Glasgow ruling. A form of contract has been devised which satisfies the contractual requirements of Her Majesty's Revenue and Customs so that clinical academic posts will remain outside the scope of VAT. A joint meeting of Her Majesty's Revenue and Customs, the Department of Health, DfES, NHS employers and the Universities and Colleges Employers Association is being convened to formalise this solution in the near future.
	It is encouraging that universities are maintaining good teaching quality at the same time as they are expanding student numbers by making strategic links across university departments. This brings together, for example, physics and chemistry lecturers to support the core scientific elements of the curriculum, thus allowing a more focused use of the particular skills of clinical academics. It is worth remembering that medical school intake has increased by 2,870 places since 1997. We have opened four new medical schools and five new centres of medical education associated with existing medical schools. We have been able to do this because we have been more creative about the way in which we use the talent around in universities, as well as clinical academics, to take on some of the important roles of teaching.
	Dental education is experiencing the biggest programme of investment since the inception of the NHS. Additional recurring funding, rising to £29 million a year by 2010–11 is providing 170 additional undergraduate training places. So we are expanding in dental schools as well as medical schools.
	I shall try to answer in the time available a number of noble Lords' questions which I have not already answered. My noble friend Lord Turnberg asked about the new money for research registrars: what would happen to the 75 per cent and would it be forthcoming from post-graduate deans? For the academic clinical fellowship programme, that 75 per cent will come from the usual sources that currently pay for clinical training. The post-graduate deans are part of the organisational partnerships that submit the applications of the programme, so they have to be fully signed up to the training programme and for their responsibilities under it.
	A number of noble Lords have raised issues concerning the research assessment exercise. The revised HEFCE-led research assessment exercise has been designed to recognise excellence in applied research and in fields crossing traditional discipline boundaries. The changes include the appointment of people with experience of commissioning and using research from industry and the public sector. This should ensure that practice-based research conducted by clinical academics is better recognised. We expect this to be demonstrated in the 2008 research assessment exercise.
	As to the issue of the Healthcare Commission and standards, I am afraid that I do not have time to respond to the questions of noble Lords but I shall write to them about it.
	Once again I thank my noble friend Lord Turnberg for giving me the opportunity to demonstrate the continuing commitment of the Government to clinical academics and the vital role they fulfil. We accept that there are still problems but we are trying to tackle them on a partnership basis, and with vigour, to overcome them.